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Wedresday, January 9, 1974
GREATER PROTECTION FOR DEPOSITORS
******
New legislation specifying the minimum size of deposits which
finance companies can accept from the general public is expected to be
introduced soon, the Financial Secretary, the Hon. C.P. Haddon-Cave, disclosed
today.
Replying to a question from the Hon. G.M. Sayer, the Financial
Secretary said that while he was not dissatisfied with the operating standards
of reputable companies accepting deposits in Hong Kong, he recognised that
there was a possibility of less reputable companies operating to lower
standards thus providing some risk for depositors.
However, under the proposed new bill the deposit-taking activities
of finance companies would be confined to a fairly restricted alientele by
specifying a minimum figure below which only licensed banks will be permitted
to accept deposits, he said.
In answer to another question, Mr. Haddon-Cave said he remained
convinced that licensed banks had the means at their command to compete on
equal terms with the finance companies.
"It is true that licensed banks have to meet capital and liquidity
provisions set by the Banking Ordinance and to this extent they may feel that
they are unfairly restricted.
"But the facts do not match this feeling. Banking licences continue
to be much sought after and there are many concerns, both overseas and local,
which have expressed a wish for a banking licence," he said.
Only a few finance companies had established local business, he
noted, and the majority did not compete directly with the local banks because
their business was directed to the supply of credit for current liabilities
and capital projects elsewhere in the Far East.
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