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At present, section 83 of the Ordinance restricts unsecured advances to directors, controllers, and certain employees of institutions and their relatives. The Hong Kong Association of Banks has submitted that the definition of "relative" is too wide. We are sympathetic to the operational difficulties that would be faced by institutions in trying to ensure compliance with the restriction. Amendments will therefore be moved at the Committee Stage to narrow the definition. To enable us to react quickly to address any problem that may arise from the proposed revision, the Financial Secretary is empowered to amend the definition by notice in the Gazette, should the need arise.
The proposed Eighth Schedule to the Ordinance sets out the various grounds for the revocation of authorisation. We will move amendments at the Committee Stage to introduce an additional ground for revocation, i.e. when an institution engages in business practices which might threaten Hong Kong's status as an international financial centre. One prominent example of such activities is money laundering. This additional ground is consistent with one of the principal objectives of the Ordinance to promote the general stability and effective working of the banking system. Furthermore, it is also in line with the Monetary Authority's role, as set out in the Exchange Fund Ordinance, and other provisions of the Banking Ordinance, relating to the promotion of Hong Kong as an international financial centre.
The Ordinance currently stipulates that all relevant written returns and information have to be filed by institutions in English and books and accounts are also required to be kept in the same language. Similar to certain provisions in the Companies (Amendment) Bill 1995 which was introduced into this Council in April this year, amendments at the Committee Stage will be moved to enable the books and returns to be kept or filed in either English or Chinese. This will place the two languages on an equal footing.
Mr President, amendments on the main issues which I have, outlined and on those issues mentioned by Mr Peter Wong, together with a host of other detailed amendments of a more technical nature to improve the provisions of the Bill will be moved at the Committee Stage. With these remarks, I commend to Members the Banking (Amendment) Bill 1995.
End/Wednesday, June 28, 1995
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