CHAPTER 3 : THE FINANCIAL SECTOR
Introduction
3.1
By the end of March, the number
of deposit-taking
institutions in operation had risen to 476, from 471 at the
end of December 1981.
five licensed
There were 122 licensed banks (1)
companies and 349 registered
deposit-taking
(2).
deposit-taking companies
3.2
During the first quarter the money supply, HK$M3,
reduced slightly, although the growth rate of domestic credit
remained high.
3.3
There were three changes to the structure of the
financial sector. First the Financial Secretary announced in
his Budget Speech on 24th February major changes to the
interest withholding tax. With effect from 25th February,
interest paid on foreign currency deposits with banks or deposit-taking companies in Hong Kong was no longer subject to
the 15% withholding tax. This tax change has contributed to a
substantial increase in foreign currency (very largely US$)
/time
(1) 3
(2)
banks incorporated outside Hong Kong which had been granted licences prior to the end of March 1982 had not yet begun to operate in Hong Kong.
8 registered deposit-taking companies which had been granted licensed deposit-taking company status prior to the end of March 1982 had not yet taken up that status. A new category of licensed deposit-taking company was created in July 1981. Under the new system, a licensed deposit-taking company cannot accept any deposit of less than HK$500,000, but there is no limit imposed on the maturity of the deposit. On the other hand, a registered deposit-taking company can only accept deposits of at least HK$50,000 maturing in at least 3 months. See also footnote (4) below.
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