Updated at 7.03pm: The last of the restrictions on the number of buildings that relatively late-coming foreign banks could operate from in Hong Kong have been lifted. The step will pave the way for those major global consumer banks like Citigroup to compete more aggressively for retail customers with local banks, and is likely to accelerate a trend towards consolidation underway in Hong Kong's banking sector. In a statement released on Friday, the Hong Kong Monetary Authority said the 'three-building' condition attached to the licences of overseas-incorporated banks authorised in and after 1978, would be lifted with immediate effect. Also lifted was a similar restriction on overseas-incorporate restricted licence banks authorised in and after 1990. ''From now on there will be no restriction on the number of branches that these institutions may maintain,'' said the HKMA. Restricted licence banks may take time-call, or notice deposits in amounts of HK$500,000 and above and generaly engage in merchant banking activities and capital market operations. The three building policy was initiated as a more severe restriction to just one building, imposed on overseas banks licensed to operate in Hong Kong since 1978 which effectively limited their presence in the SAR to just one branch. That measure, according to policymakers, was designed to avoid over-crowding in the retail banking market, but was relaxed to two buildings in September 1994, and three buildings in September 1999 though activity in the additional buildings was restricted to back office processing and administration. The decision to lift all of these restrictions follows on a policy review conducted by the HKMA. ''The review showed that this 2-year old policy has outlived its usefulness given such factors as advances in technoloogy and the increasing importance of electronic delivery channels,'' said the HKMA yesterday. ''The removal of the three-building condition will provide foreign banks with greater flexibility in doing business and will further enhance Hong Kong's reputation as a free and open financial centre,'' said the HKMA's deputy chief executive, David Carse. From now on foreign banks could ''set up unlimited number of offices in unlimited number of buildings. They can also conduct any business they are legally permitted to do within these offices,'' said Mr Carse.