2.
Following the collapse of two banks in 1965, a general moratorium on new banking licences was imposed from 1965 to 1972. It was re-imposed from 1975 to 1978 and a further suspension of licensing was imposed between 1979 and 1981.. In 1976, the Deposit-taking Companies Ordinance, 1976, was enacted requiring other deposit-taking companies to obtain registration from the Commissioner. obtain registration, the companies had to comply with requirements regarding capital and size of deposits. Supervision of these deposit-taking companies was in other respects expressly limited so as not to place the Commissioner:
TO
"in a position of responsibility for the prudential conduct of business by companies, which it is not intended to accept."
(Statement by Financial Secretary in Legislative
Council, 1976.)
3.
Denied banking licences, international banks set up deposit-taking companies which enabled them to conduct nearly all the business they wished to perform. In fairness to licensed banks who had to meet more rigorous requirements, a greater degree of prudential supervision was given to deposit- taking companies from 1978. This change did not impede the increase in numbers. Forty companies were registered in the first quarter of 1981 so that
in April, 1981, a moratorium was imposed on new
registrations unless more than 50 per cent of the voting capital was held by a recognized bank.
2
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