THE Monetary Authority has drafted a proposal that would remove the much-criticised cash-handling charges levied on bank customers when they deposit bulk cash.
Chief executive Joseph Yam Chi-kwong has confirmed for the first time that the Exchange Fund Advisory Committee, chaired by Financial Secretary Hamish Macleod, has discussed the issue of bulk cash deposit charges.
''We have forwarded a proposal to the note-issuing banks for their consideration. The ball is in their courts,'' Mr Yam said.
Acknowledging that such charges were ''obviously undesirable'' and which banks and non-bank customers would not like to accept, he said the solution was to terminate the pass-on arrangement ''by the note-issuing banks in their dealing of banknotes with other banks, and banknotes would be supplied against clearing balances of banks for Hong Kong dollar value''.
The pass-on arrangement was agreed at the time the US dollar peg was initiated.
Note issuers need to get certificates of indebtedness from the Exchange Fund at a fixed rate of HK$7.80 to US$1 before they can issue new notes.
However, the two note-issuing banks were concerned at that time about ''the possibility that they might have to acquire US dollars in the foreign exchange market at a rate more expensive than $7.80 for the purpose of satisfying the demand for banknotes, thereby incurring an exchange loss'', Mr Yam said.
