Public to have say on more deposit protection

A public consultation will be launched next month on extending deposit protection scheme coverage to integrated bank accounts that offer overdraft facilities on a secured basis, such as credit card payments.

It means that deposits in integrated accounts used for collateral for mortgages, credit card payments or stock settlements might be covered by the full deposit protection scheme - a temporary measure introduced in October to protect depositors from bank failures.

Under the Deposit Protection Scheme Ordinance, deposits that are secured against other assets are not guaranteed, while fixed deposits of longer than five years and offshore deposits are also excluded.

In a meeting between two Democratic Party lawmakers and Deposit Protection Board chiefs yesterday, the board was urged to amend the law to extend coverage to depositors whose savings are used as collateral for overdraft facilities.

Lawmakers quoted the board's chief executive, Raymond Li Ling-cheung, as saying it would start a public consultation in April on extending coverage of the scheme, in an attempt to revise the ordinance this year.

A Hong Kong Monetary Authority spokeswoman confirmed a consultation document on the deposit protection scheme would be issued next month. 'The consultation will cover the whole scheme in general, including the long-term development of the length and coverage of the deposit protection.'