WEDNESDAY, JANUARY 30, 1980
17
BANK ING (AMENDMENT) BILL 1980
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THE BANKING (AMENDMENT) BILL 1980, WHICH SEEKS TO GIVE THE GOVERNOR-IN-COUNCIL POWER TO AMEND OR REVOKE A CONDITION ALREADY ATTACHED TO A BANK LICENCE, OR TO ATTACH A NEW CONDITION TO A LICENCE, WAS INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY.
MOVING THE SECOND READING OF THE BILL THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE EMPHASISED THAT THE POWER BEING SOUGHT HAD NOTHING TO DO WITH SO-CALLED MONETARY POLICY.
THE NEED FOR THE AMENDMENT AROSE FROM THE CONDITION THAT BANKS WITH LICENCES GRANTED BETWEEN MARCH 1978 AND AUGUST 1979, MAY ONLY CONDUCT BUSINESS FROM ONE OFFICE IN HONG KONG. THIS HAS BEEN FOUND TO BE IMPRACTICABLE DUE TO SHORTAGE OF OFFICE SPACE IN CENTRAL, AND THE SUBSEQUENT LEGAL INTERPRETATION OF THE CONDITION WAS INCONSISTENT WITH THE GOVERNMENT'S ORIGINAL INTENTION WHEN APPLYING IT, SIR PHILIP EXPLAINED,
AT PRESENT, THE ORDINANCE MERELY PERMITS A CONDITION TO BE ATTACHED TO A LICENCE AT THE TIME WHEN IT IS FIRST GRANTED. THE ONLY WAY IN WHICH A CONDITION CAN BE AMENDED OR WITHDRAWN OR ADDED IS FOR THE LICENCE TO BE REVOKED - DESIGNED FOR CIRCUMSTANCES SUCH AS A BANK MEETING SERIOUS LIQUIDITY PROBLEMS AND A NEW LICENCE GRANTED.
WITH THE EASIER PROCEDURE PROVIDED BY THE BILL THE CONDITION TO THE BANKING LICENCES COULD BE AMENDED SO AS TO PERMIT THE 41 BANKS IN QUESTION TO OPEN SERVICE AND ADMINISTRATIVE OFFICES TO CARRY OUT COMPUTER OR SIMILAR FUNCTIONS, IN AS MANY LOCATIONS AS THEY CHOOSE, PROVIDED THAT THE IR CUSTOMERS HAVE NO ACCESS WHATEVER TO THOSE OFFICES, SIR PHILIP SAID.
HE POINTED OUT THAT THE NEW POWER TO AMEND AN EXISTING CONDITION, OR TO ATTACH NEW CONDITIONS WILL BE AVAILABLE FOR USE IN ANY CIRCUMSTANCES IN RELATION TO ALL LICENSED BANKS IN HONG KONG.
HE BELIEVED IT WAS RIGHT AND PROPER THAT THE GOVERNMENT SHOULD HAVE THIS POWER, AS PART OF THE ARMOURY OF MEASURES AVAILABLE TO CONTROL THE BANKING SECTOR FOR PRUDENTIAL PURPOSES, IN OTHER WORDS FOR THE BETTER PROTECTION AND SAFEGUARD OF DEPOSITORS.
THE POWER IS COMMONLY AVAILABLE IN OTHER COUNTRIES WHERE THE LICENSING AUTHORITIES CAN GRANT CONDITIONAL LICENCES, HE SAID.
DEBATE ON THE BILL WAS ADJOURNED,