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Changes urged to bank disclosure tack on deposit protection cover

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Banks must tell customers whether their accounts or the transactions they conduct are covered by the deposit protection scheme to strengthen disclosure, the Hong Kong Deposit Protection Board suggested yesterday.

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The government-appointed board also recommended simplifying the process of calculating accrued interest on deposits and liabilities in the event of a bank collapse to speed up payouts.

The proposals are included in the second stage of a consultation launched yesterday.

The board decided to proceed with its first-stage recommendations, including raising the deposit protection limit to HK$500,000 from HK$100,000 and widening the scope to cover secured deposits.

The exact premium rate to be paid by banks still has to be discussed with the industry.

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Under the current scheme, banks need only disclose to customers once if a deposit is not protected by the scheme, but this is not mandatory. But the board suggested banks should remind customers in every transaction, except for automatic rollovers.

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