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As one of the world's leading international financial centres, Hong Kong has a strict and highly regarded banking regulatory environment designed to maintain banking and monetary stability. The Hong Kong Monetary Authority (HKMA) is responsible for regulating and supervising the banks and the business of taking deposits in Hong Kong.

Hong Kong maintains a three-tier system of deposit-taking institutions, namely, licensed banks, restricted-licence banks and deposit-taking companies which are collectively known as authorised institutions. These institutions have to comply with the provisions of the Banking Ordinance to

  • maintain adequate liquidity and capital adequacy
  • submit periodic financial information to the HKMA
  • adhere to limitations on loans to any one customer or to directors and employees
  • seek approval for the appointment of directors and chief executives, and for controllers.

Only licensed banks may operate current and savings accounts, and accept deposits of any size and maturity from the public and pay or collect cheques drawn by or paid in by customers.

Restricted licence banks are principally engaged in merchant banking and capital market activities. They may take deposits of any maturity of HKD500,000 and above.

Deposit-taking companies operate as subsidiaries of banks or associated companies. They specialise in the consumer finance and securities businesses and are authorised to accept deposits of HKD100,000 or more with maturity terms of at least three months.