Hong Kong Monetary Authority Refuses To Cap Bank Fees And Charges

Mary Swire, Tax-news.com, Hong Kong

15 March 2001

Amid concerns that Hong Kong's poorer bank customers will suffer, the Hong Kong Monetary Authority (HKMA) has announced that it does not intend to set limits on bank fees and charges in its attempt to support and maintain the free market.

In a press conference earlier this week, HKMA deputy chief executive David Carse said: 'In a free market, a bank should be able to increase its fees and charges, we hope in doing so they will take into account the needs of the socially disadvantaged members of the community.'

The HKMA is currently undertaking a review of the experiences of other countries such as Britain and Australia and will take them into account when dealing with Hong Kong's banking needs. In particular the review focuses on how the countries' banking fees and interest rate deregulations are managed. Mr Carse said: 'In places like the UK, which has been deregulated for many years, the banks are still addressing the issues of basic banking services.'

He continued: 'The important issue for banks is to let customers have choices in banking services. The key issue is that the bank should give adequate notice to customers about the new fees and charges.'

As part of the review of the code of banking practice on fees and charges, the HKMA is working on matters relating to disclosure of information concerning fees and charges. It is expected that the review will be completed by July, 2001.

The majority of banks in Hong Kong have already confirmed that they plan to reduce costs in areas such as over the counter transaction handling fees and minimum deposit charges.

One of the first banks to raise its fees and charges was Standard Chartered which will charge customers HK$100 for every month their accounts fall below HK$10,000 from next month. HSBC, Hong Kong's largest banking operation, says it will also implement new fees and charges from next month including a HK$5 fee for every over the counter transaction and introduce a limit on the existing free use of ATMs.

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