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

    HKMA on Fintech Adoption and Innovation by Banks in Hong Kong

    HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.

    May 20, 2020 WebPage Regulatory News
    News

    BIS on Impact of Increasing Use of Cloud Technology on Cyber Risk

    BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guide for Managing Climate and Environmental Risks

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Issues Opinion on Revisions to CRR in Response to COVID Crisis

    ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.

    May 20, 2020 WebPage Regulatory News
    News

    EBA Assesses Interlinkages Between Recovery and Resolution Planning

    EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).

    May 20, 2020 WebPage Regulatory News
    News

    SRB Publishes Final MREL Policy Under the Banking Package

    SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Releases Results of March Survey on Credit Terms and Conditions

    ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.

    May 19, 2020 WebPage Regulatory News
    News

    FINMA Adjusts Deadlines for COVID-19 Relief Measures for Banks

    FINMA published guidance (06/2020) on extending or discontinuing various exemptions that were granted due to the COVID-19 crisis.

    May 19, 2020 WebPage Regulatory News
    News

    SRB Consults on Standardized Data Set for Bank Valuation in Resolution

    SRB launched a consultation on the minimum data needed for valuation of a bank in resolution.

    May 19, 2020 WebPage Regulatory News
    News

    EIOPA Changes Frequency of RFR and EDA Processes to Two Weeks

    EIOPA announced a change in the frequency of current extraordinary processes for risk-free interest rate term structures (RFR) and symmetric adjustment to equity risk (EDA) from a weekly basis to every two weeks.

    May 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5203