The
Three-tier Banking System
Hong Kong has one of the highest concentrations of banking
institutions in the world. 73 of the largest 100 banks in
the world have an operation in Hong Kong. At the end of December
2002, there were 133 licensed banks, 46 restricted license
banks and 45 deposit-taking companies in business. These 224
authorised institutions operate a comprehensive network of
1,416 local branches and 196 of them are beneficially owned
by interests from 31 countries. In addition, there are 94
local representative offices of overseas banks in Hong Kong.
Licensed Banks
In Hong Kong, only licensed banks may operate current and
savings accounts, and accept deposits of any size and maturity
from the public and pay or collect cheques drawn by or paid
in by customers.
Restricted License Banks
Restricted license banks are principally engaged in merchant
banking and capital market activities. They may take deposits
of any maturity of HK$500,000 (approximately US$64,103) and
above.
Deposit-taking Companies
Deposit-taking companies are mostly owned by, or otherwise
associated with banks. These companies engage in a range of
specialised activities, including consumer finance and securities
business. They may take deposits of HK$100,000 (approximately
US$12,821) or above with an original term of maturity of at
least three months.
Local Representative Offices
Apart from the above three categories of authorised institutions
that are permitted to carry on the business of taking deposits
in Hong Kong, overseas banks may establish local representative
offices in Hong Kong. However, they are not allowed to engage
in any banking business and its role is confined mainly to
liaison work between the bank and its customers in Hong Kong.
The above authorized institutions offer a variety of financing
services to SMEs to meet the need of different industries.
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