Banks were yesterday warned they could face tighter controls if they continued to increase charges without taking into account the overall interests of customers. A working group under the Hong Kong Monetary Authority is looking at tightening the existing code of banking practice to enhance the transparency and fairness of bank operations. Secretary for Financial Services Stephen Ip Shu-kwan last night warned the Government could resort to implementing new laws if there were signs that banks had formed a cartel to control the market. His remarks came as the legislature passed a motion calling for the Monetary Authority to have greater power to monitor bank charges. Controversy arose last month when Standard Chartered decided to impose a monthly fee of $100 on clients with balances less than $10,000 - ahead of the interest rate deregulation in July. While the Government would not intervene with fee-setting, Mr Ip said it hoped everyone could get banking services at a reasonable rate. He said the Monetary Authority had written to the Association of Banks, asking it to consider the impact on needy depositors when increasing charges. 'We will keep a close watch on the trend [of bank charge increases]. For improving the protection of consumers, the Government may consider different ways, including amending the laws to give the Monetary Authority more power,' he said. Other options under consideration include setting up an independent body to check if banks are following the code of practice or a 'banking ombudsman' to hear customer complaints. But unionist legislator Lau Chin-shek urged the Government to form a statutory code for banking practice. Mr Ip said that would reduce the flexibility of bank operations. Non-affiliated legislator Eric Li Ka-cheung, a non-executive director of the Hang Seng Bank, also warned against government intervention in the free market. Unionist legislator Lee Cheuk-yan warned of social discord if banks continued to ignore grassroots concerns.