FRIDAY, MAY 8, 1981
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BANKING, DEPOS IT-TAK ING COMPANIES AMENDMENT BILLS
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THE GOVERNMENT GAZETTE TODAY (FRIDAY) CONTAINS THE TEXT OF THE BANKING (AMENDMENT)(NO. 2) BILL 1981 AND THE DEPOSIT-TAK ING COMPANIES (AMENDMENT)(NO. 3) BILL 1981.
THE PURPOSE OF THESE BILLS, WHICH WERE FORESHADOWED IN THE FINANCIAL SECRETARY'S BUDGET SPEECH ON FEBRUARY 25 (PARAGRAPH 287), IS TO IMPROVE THE GENERAL QUALITY OF THE PRUDENTIAL SUPERVISION EXERCISED OVER THE ACTIVITIES IN HONG KONG OF BANKS AND DEPOSIT-TAKING COMPANIES.
THE BILLS THUS COMPLEMENT THE BANKING (AMENDMENT) BILL, AND THE DEPOSIT-TAKING COMPANIES (AMENDMENT) (NO. 2) BILL, PUBLISHED ON APRIL 10, WHICH DEAL WITH THE DEFINITION OF BANKING BUSINESS AND THE CREATION OF A NEW CATEGORY OF LICENSED DEPOSIT-TAK ING COMPANY.
THE BILLS INCREASE THE MINIMUM PAID UP SHARE CAPITAL REQUIRED BY LOCALLY-INCORPORATED BANKS AND REGISTERED DEPOSIT-TAKING COMPANIES (WITH AN APPROPRIATE TRANSITIONAL PERIOD FOR THOSE NOW BELOW THE NEW MINIMUM). THEY ALSO INTRODUCE, OR TIGHTEN, CERTAIN CONTROLS ON ADVANCES TO DIRECTORS OF BANKS AND DEPOSIT-TAK ING COMPANIES, AND TO CERTAIN OTHER CUSTOMERS.
THE DEPOSIT-TAKING COMPANIES (AMENDMENT)(NO. 3) BILL INTRODUCES LIMITS, RELATED TO ITS PAID UP CAPITAL AND RESERVES, ON THE SHAREHOLDINGS OR INTERESTS IN LAND AND PROPERTY WHICH MAY BE HELD BY A DEPOSIT-TAKING COMPANY. THE BILL ALSO PROVIDES THAT ALL DEPOS IT-TAKING COMPANIES WILL IN FUTURE REQUIRE THE APPROVAL OF THE COMMISSIONER OF DEPOSIT-TAKING COMPANIES BEFORE OPENING BRANCHES IN HONG KONG OR, FOR COMPANIES INCORPORATED IN HONG KONG, ABROAD.
A NUMBER OF MINOR AMENDMENTS TO THE TWO ORDINANCES ARE CONTAINED IN THE TWO BILLS, WHICH ALSO AIM TO REVISE THE PENALTIES SET FOR DIFFERENT OFFENCES.
THE FINANCIAL SECRETARY WILL MOVE THE SECOND READINGS OF THESE TWO BILLS IN THE LEGISLATIVE COUNCIL ON MAY 13.
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