• Thu
  • Dec 18, 2014
  • Updated: 4:46pm
Lai See
PUBLISHED : Wednesday, 30 January, 2013, 12:00am
UPDATED : Wednesday, 30 January, 2013, 3:43am

A matter of some interest at Standard Chartered


Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.

A reader has complained bitterly to us over what he feels are Standard Chartered Bank's opaque practices with regard to time deposits.

He recently opened an integrated currency account with the bank in the hope of preserving his savings in a 12-month time deposit. This he did online and put in US$35,000 for which he receives the princely yield of 0.1 per cent. He also wanted a yuan time deposit but this could only be done at a branch.

After a 30-minute wait at the Chai Wan branch he was presented with a rate sheet that offered 2.3 per cent for a yuan 12-month time deposit. But he was astonished to see that the rate being offered for a US dollar 12-month time deposit was 0.85 per cent - considerably higher than the 0.1 per cent offered online. Indeed, the teller said there were always better rates on offer at the branch than online.

He then tried to break his original time deposit but discovered this would cost him US$1,800. Long gone are the days when the banks would simply forfeit interest when breaking a time deposit. Such is their hunger for fees they now take a slice of the principal too.

Asked to explain the disparity in time deposit rates Standard Chartered told Lai See that, "the bank offers different promotions through various channels, catering for different segments and customer needs. The preferential deposit interest rates shown on our website are a special promotional campaign targeting new fund deposits at a branch or through phone banking. Therefore, time deposits set up through online banking are not eligible for this promotional offer".

The bank also directed us to a link showing these promotional offers online.

However, anyone visiting the StanChart website and clicking on "time deposits" will not find any mention of promotional offers, though possibly account holders may have better access. Nevertheless our reader didn't spot them. If they are there, they are certainly well hidden.

You would have thought it would have been useful to put a notice online together with its deposit rates, pointing out that better rates were available at branches. But then this might deter clients from going for the lower online rates.


Tweet your ID

Those wanting to object to the government's proposal to remove director's identity card numbers and home addresses from the Companies Registry have a new platform for showing their discontent. Governance activist David Webb has started a Twitter campaign. Simply tweet "HKIDs are not private. My #HKID is [insert id number]. I object to the new directors law. Pass it on."

The argument against the law, as we discussed yesterday, is that IDs are not private, they are simply a more specific name. Our ID is unique whereas our name is often not. There is another aspect to this, eloquently spelt out by my colleague, Tom Holland, yesterday. He makes the point that in return for the limited liability status of their companies, directors should be obliged to provide their unique ID so that banks and investors can check their backgrounds. To claim that IDs are a privacy issue is clearly bogus.

So why does the government want to do this? As we said yesterday, the only people that need to worry about releasing their ID numbers are those involved in wrongdoing.

So why is the government helping those intent on doing wrong? Surely not because the government or its friends are in danger of being embarrassed? We are supposed to be an international finance centre. This sort of thing undermines Hong Kong's reputation for transparency and rule of law.

There have also been recent revelations by Ming Pao that 12 of the 16 members of the Legislative Council committee that scrutinised this legislation are company directors and have incorrectly declared offices or factories as their residential address in the Companies Registry. This is a criminal offence. Not only should they be prosecuted but the legislation should be re-examined since the committee is clearly conflicted.

Revelations of law-breaking by government officials or legislators is becoming an everyday event. But then again this is a government that breaches its own regulations by happily destroying large numbers of documents at a phenomenal rate without properly appraising them for preservation in the archives.


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(1) Intra-bank imperfect rates competition
Inter-bank rates collaboration
Civilized corruption
(2) Banks in HK “scrhool” not only the living public
but also dead patrons
In California, e.g., banks surrender funds in dormant accounts to the state
But here, they pocket them thanklessly
because the government is too lazy and timid to regulate
blaming troublesome laws inhibiting every sensible action.
The problem with banks these days is that they all see themselves as glorified merchant banks. In the past an ordinary member of the public could place an amount in a bank account and expect to receive a reasonable interest rate. The banks could pay this interest rate by making investments and the profit would be the difference between their return on investment and the interest they paid. At this time the banks carried more risk. These days the ordinary member of the public, in order to get a return on their savings, need to make the investment (often through the bank) and pay bank charges on stock purchases. The banks have transferred the risk away from themselves and directly onto the shoulders of their customers.
So now we put our savings into the bank, we need to keep a minimum amount in the account or risk paying a charge, we need to select the investment, we need to buy the stocks, etc., we need to pay all the fees associated with the purchase and on top of that we need to pay the bank a fixed amount charge. In order for this to work it is in the interests of the banks to pay an interest rate that will not maintain the real value of the money held. Never mind online or over the counter the ordinary member of the public is getting royally sc--re-w--d.


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