Monetary authority issues guidelines for the launch of virtual banks in Hong Kong
Authority to receive feedback until March 15 and final regulations will be issued in May
Virtual banks looking to set up in Hong Kong will need to have at least HK$300 million (US$38.36 million) in capital, and cannot impose a minimum account balance or low balance fees, according to draft guidelines released by the Hong Kong Monetary Authority on Tuesday.
The authority will receive feedback on these guidelines until March 15 and the final regulations will be issued in May. Non-financial and traditional banks can apply for the licences now.
“Overseas experience has shown some successful virtual bank operations, while small and medium enterprises could get better banking services and lending,” Arthur Yuen, the deputy chief executive of the authority, said during a media briefing on Tuesday.
“We expect virtual banks will focus on retail and SME businesses, but we will not require what type of services they must offer to customers. They could choose their business scope, ranging from payments, deposits and loans, to wealth management and other lending,” said Yuen.
The authority will require them to set up a locally incorporated bank to offer retail banking, which is the same for conventional banks involved in retail banking.