HKMA guidelines restrict virtual playing field to existing lenders
The Hong Kong Monetary Authority (HKMA) has brought emerging virtual banks under its supervision.
In a draft of guidelines given to bankers for comment, the HKMA has outlined the principles it would apply in authorising and monitoring on-line banks.
The HKMA said no guidelines would be implemented before the second half of next year.
The most contentious proposal - and which may be difficult to police - is one that would restrict the virtual banking playing field to existing lenders.
In line with authorisation policies for conventional banking operations, the HKMA in the draft said a locally incorporated virtual bank may be set up only by: Upgrading an existing locally incorporated restricted licence bank or deposit-taking company into a virtual bank, or Converting an existing locally incorporated bank into a virtual bank.
The HKMA also proposed that any locally incorporated on-line bank be 'at least 50 per cent owned by a well-established bank or other supervised financial institution in good standing in the financial community and with appropriate experience'.
It said overseas on-line banks wishing to establish in Hong Kong must come from a country with established e-banking regulations.