THE Government has temporarily dropped tentative proposals to statutorily amend residential mortgage lending ratios in Hong Kong. Under a plan considered in the summer, the Hong Kong Monetary Authority considered bringing the force of banking law behind the voluntarily imposed 70 per cent ceiling on residential mortgage lending. Monetary authority deputy chief executive David Carse said yesterday the proposal has been shelved because the territory's residential property market had apparently cooled sufficiently not to require the change. ''From our viewpoint this change formed part of our view of credible prudential requirements in bank lending,'' he said. Mr Carse explained: ''We are not intending to legislate limits on mortgage lending or legislate away risk. ''Our job is to monitor developments in the property market and the banks' involvement in it and to prepare contingency plans if the market looks as if it is overheating.'' If the proposal were carried through it would require the approval of the Financial Secretary. Presumably there would be some consultation with banks. It would require an amendment to a schedule in the legislation covering residential mortgage lending. At present the ceiling fixed in the schedule is 90 per cent. ''I find it is not satisfactory that we are imposing a voluntary limit at 70 per cent, which we see as a prudential guideline for the long term, when the limit in the schedule is 90 per cent,'' said Mr Carse. Should banks wish to lend outside the voluntary limit currently set, the monetary authority is empowered to demand that the capital ratio pertaining to this debt is higher than the current 50 per cent weighting. Normal personal debt requires a 100 per cent rating. This was the level any mortgage lending outside the 70 per cent guideline would require, said Mr Carse. Mortgage lending has come under the monetary authority and bank-lending policy spotlight since 1991 when residential flat prices rose significantly and monthly sales along with purchase agreement volumes shifted to historic levels. The 70 per cent ceiling on lending was imposed as part of a package or proposals to cool down the market and curtail speculation.