HKMA Consults on Guideline for Authorization of Virtual Banks
HKMA is consulting on the revised guideline on the authorization of virtual banks. The consultation ends on March 15, 2018. HKMA intends to consider comments received during the consultation and issue a revised guideline in May 2018.
The guideline on authorization of virtual banks sets out the principles for deciding whether to authorize virtual banks to conduct banking business in Hong Kong. As defined in the revised guideline, a “virtual bank” refers to a bank that delivers retail banking services primarily, if not entirely, through the internet or other forms of electronic channels, instead of physical branches.This guideline supersedes the previous guideline that was first issued in 2000 under section 16(10) of the Banking Ordinance on May 05, 2000 and subsequently updated on September 21, 2012. HKMA highlights that the basic principles in the 2000 guideline remain applicable.
HKMA believes that the development of virtual banks will promote fintech and innovation in Hong Kong and offer a new kind of customer experience. Virtual banks can also help promote financial inclusion as they normally target the retail segment, including the small and medium-size enterprises (SMEs).
Comment Due Date: March 15, 2018
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