Hong Kong Deposit Protection Board proposes increase in deposit protection amount to HKD 800,000
The Hong Kong Deposit Protection Board has recently put forward a proposal to increase the deposit protection amount from HKD 500,000 to HKD 800,000. This move comes as the Board aims to align the protection level with international standards, according to Liu Yanqing, the chairman of the Board of Depository and Insurance. It is important to note that the decision to enhance the protection was not influenced by the bank failures that occurred in the United States earlier.
Under the current protection level of HKD 500,000, a significant majority of depositors, amounting to 20.4 million individuals, are fully guaranteed. This accounts for 89% of the total number of depositors and covers a substantial total of HKD 2.6 trillion in deposits. However, with the proposed increase in deposit protection to HKD 800,000, the number of fully guaranteed depositors is projected to rise to 21.23 million individuals, accounting for 92% of all depositors. Additionally, the protected deposits are anticipated to increase to HKD 3.3 trillion, encompassing 25% of the total deposits within the banking system.
Ho Hon-kit, the president of the Board of Depository, expressed optimism about the industry’s response to the plan and was confident in receiving support from the banks. It remains to be seen whether the banks will transfer any costs to customers, as this will depend on the individual operating models of different banks. Importantly, it should be noted that virtual assets, which are categorized as investment tools, are not included within the scope of deposit protection.
The proposal has been met with positive initial reactions from the industry and is aimed at providing increased security for depositors in Hong Kong. The Hong Kong Deposit Protection Board is taking proactive measures to ensure the financial stability of the banking system, enhance investor confidence, and align with global best practices.
Disclaimer: This article is sourced from the Financial Associated Press and has been published by Oriental Fortune. It is important to note that this article does not constitute investment advice and readers should proceed at their own risk.