HONG KONG LEGISLATIVE COUNCIL
—————————一九八九年七月十九日
香港立法局
Second Reading of Bills
19 July 1989
36
BANKING (AMENDMENT) (NO. 2) BILL 1989
FINANCIAL SECRETARY: Sir, I move that the Banking (Amendment) (No. 2) Bill 1989 be read the Second time.
Following a comprehensive review of the three-tier system of deposit-taking institutions, which included extensive consultation with the banking sector, the Government announced in March this year certain proposed changes to that system. The main purpose of this Bill is to amend the Banking Ordinance to give effect to those changes. The opportunity is also taken to incorporate other amendments to overcome problems and remove uncertainties identified in the working of the Ordinance.
Amendments to the three-tier system Use of banking names
One of the principal features of our banking legislation is the tight control exercised over the use of banking names and descriptions. At present only those in the first tier, licensed banks, are allowed the privilege of describing themselves as banks. Those in the other two tiers, licensed and registered deposit-taking companies, cannot do so and this has inhibited those who wish to develop their business overseas. Such institutions, which may wish to operate internationally, find the term "deposit-taking companies" either not understood or pejorative, and have experienced difficulty in getting recognized and treated as credit-worthy, well-supervised institutions.
To overcome these difficulties, the Bill replaces the existing categories of licensed deposit-taking company and registered deposit-taking company in the Ordinance with the categories of restricted licence bank and deposit-taking company. Clause 39 amends section 97 to provide that restricted licence banks may use the word "bank" or its derivatives in describing their business, provided that this is qualified by such adjectives as "restricted licence", "merchant", "investment", "wholesale", or a term specified by the Commissioner of Banking by notice in the Gazette. Overseas incorporated banks authorized as restricted licence banks, and operating in branch form, would be allowed to use their corporate names which include the word "bank", provided these are qualified in equal prominence by the words "restricted licence bank" next to them.
Minimum capital requirements
To ensure that only well capitalized institutions are entrusted with public deposits, the minimum capital requirement for the registration of new deposit-