The Hong Kong Monetary Authority (HKMA) released the conclusions from its public consultation on reviewing the three-tier banking system, outlining its plan to transition to a two-tier system. The consultation, which ran from 26 June 2023, proposed merging deposit-taking companies (DTCs) into restricted licence banks (RLBs) over five years. The RLB requirements include a minimum capital of HK$100 million and a minimum deposit size of HK$500,000. The HKMA received seven supportive submissions from the banking industry and professional bodies. Key adjustments include allowing DTCs to convert to RLBs without new applications, provided they meet capital requirements, and permitting converted RLBs to manage existing deposits under previous DTC rules. The HKMA will guide DTCs through the transition and prepare legislative changes.
Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/08/20240805-5/