66
CURRENCY AND BANKING
Bank note issue
Government $1 note issue
Government $1 coin issue
Subsidiary notes and coin
$913,661,890
36,891,487
7,500,000 25,978,328
The Colony has been a part of the sterling area since August 1941. Exchange Control is administered under powers conferred by the Defence (Finance) Regulations, 1940. The system of control is based on that in force in the United Kingdom, with some modifications made necessary by the position of Hong Kong as an entrepôt.
BANKING
The Banking Ordinance provides that no institution may engage in banking without obtaining a licence-from the Governor in Council and that each bank must publish an annual balance sheet. At the end of 1960 there were eighty six licensed banks, of which forty four were authorized wholly or partially to deal in foreign exchange. A list of these latter is given in Appendix III. Many of these banks have branches or correspondents throughout the world and are thus able to offer comprehensive banking facilities to the public. Interbank transactions are facilitated by a clearing house association with fifty three members. Monthly clearings in 1960 averaged $1,925 million. Total bank deposits at 30th June 1960 were 2,389 million, and the total loans and advances to commerce and industry were $1,570 million.
The growth of local branch banking in the subsidiary centres of commerce and industry accelerated very rapidly during the year. At the end of 1959 there were 13 branches of such banks, of which none were in the New Territories. At the end of 1960 there were 27 branch banks, and there are signs of a further expansion in 1961. The first branches of the Hongkong and Shanghai Banking Cor- poration in the New Territories opened in rented accommodation at Tai Po and Sheung Shui early in the year, and in April a large branch office commenced business at Tsuen Wan. The Chartered Bank also started business in temporary accommodation in Tsuen Wan. Two other banks, the Far East Bank and the Canton Trust and Commercial Bank, opened during the year in Yuen Long.
The Legislative Council approved a resolution in September to enable banks to pay up to 3% (in place of 21%) interest on savings accounts, without deducting tax at the time of crediting payment; the intention was to encourage small savings.