Featured Product

    HKMA Announces Measures to Support SME Lending by Banks

    October 16, 2019

    HKMA announced measures to support lending to small and medium-sized enterprises (SMEs). These measure were agreed upon at the first meeting of the Banking Sector SME Lending Coordination Mechanism. Representatives from the Hong Kong Association of Banks (HKAB), nine major banks, and the Hong Kong Mortgage Corporation Limited (HKMC) attended the meeting. HKMA stated that banks should provide funding support to small and medium-size enterprises (SMEs) as far as their credit policies and risk management principles allow. Banks will follow the guidelines set out in the “Hong Kong Approach to Corporate Difficulties.”

    Banks will enhance communication with the SME customers encountering financial difficulties and will not withdraw credit lines hastily or take other credit actions that will adversely affect the business operations of custoemers. At the meeting, the banks agreed to adopt the following measures to support SMEs:

    • Banks agreed to make good use of the released countercyclical capital buffer (CCyB) by HKMA from 2.5% to 2.0%.
    • Banks will proactively allow its SME customers to extend their repayment period, including making use of the recently introduced principal moratorium measure under the SME Financing Guarantee Scheme (SFGS), to lessen the cash flow pressure faced by SMEs. This measure will be adopted as far as risk management principles permit.
    • Banks will continue to explore more concessionary measures to alleviate the financial burden of SMEs. Most banks have already reduced the guarantee fee and offered interest rebate under the SFGS.
    • Banks are strengthening their internal communication to ensure that frontline staff understand the banks’ policy on supporting SMEs without compromising prudent risk management principles.
    • Banks support the real estate sector to help retailers ride out the current difficult period through arrangements such as rental reduction or rent-free period.
    • Banks indicated that they will make reference to the practices of those banks offering “Simple Bank Accounts” services and conduct less extensive customer due diligence according to risk-based principles to facilitate SMEs to open bank accounts.
    • Banks indicated that they are willing to consider offering credits to finance SMEs’ plant relocation or construction of new plants  to meet the additional expenses arising from the restructuring of their supply chains
    • HKAB and the HKMC will set up a mechanism to collect SMEs’ opinions on the government’s SME support policies received by banks. The opinions will then be passed onto the government to facilitate enhancement of these policies.

    Keywords: Asia Pacific, Hong Kong, Banking, SME Lending Coordination Mechanism, SME, CCyB, HKMA

    Related Articles
    News

    Regulators Fine Goldman Sachs for Risk Management Failures

    FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).

    October 23, 2020 WebPage Regulatory News
    News

    Canada Hosts International Conference of Banking Supervisors

    BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.

    October 22, 2020 WebPage Regulatory News
    News

    FCA Proposes More Measures to Help Insurance Customers Amid Crisis

    FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.

    October 21, 2020 WebPage Regulatory News
    News

    EBA Issues Opinion to Address Risk Stemming from Legacy Instruments

    EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.

    October 21, 2020 WebPage Regulatory News
    News

    ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020

    ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).

    October 21, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Policy Statement Amending Benchmarks Regulation

    HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.

    October 21, 2020 WebPage Regulatory News
    News

    APRA Initiates Action Against a Bank for Liquidity Compliance Breach

    APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.

    October 21, 2020 WebPage Regulatory News
    News

    PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2

    PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Reduce Impact of Large Bank Failures

    US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule on Net Stable Funding Ratio Requirements

    US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.

    October 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6004