Other Information

Photo Gallery
Account Opening
Frequently Asked Questions
Investment Products Related to Lehman Brothers
Privacy Policy Statement
Security Information
Access to Information
Copyright Notice
Disclaimer
Contact Us
RSS Feeds
15.6272

Frequently Asked Questions -
Banking Stability

A. Account Operation

(including general questions on banking services, terms and conditions, and fees and charges)

A1. Are there any guidelines of the HKMA governing bank’s account opening for customers? [Answer]

A2. Can banks ask corporate customers to provide information of its shareholders? [Answer]

A3. Can banks impose nationality restrictions on customers when they open a bank account? [Answer]

A4. Can a bank close my account? [Answer]

A5. Can I get monthly account statements from banks? [Answer]

A6. Can a bank change the Terms and Conditions without giving any notice? [Answer]

A7. Would I be charged by banks for provision of administrative services, such as photocopying and printing? [Answer]

A8. My bank account has been inactive for some time. Would I be charged? [Answer]

A9. Can banks change the level of fees and charges? [Answer]

A10. I have low balance in my bank account. Why does the HKMA allow banks to charge a low-balance fee? [Answer]

A11. There is no bank branch near where I live. Can the HKMA require a bank to open a branch there? [Answer]

B. Complaints about Banks

Please visit the webpage of “Complaints about Banks” of the HKMA’s website and refer to the frequently asked questions which explain the HKMA’s role and procedures in handling complaints.

C. Credit Cards

(Please refer to Section J “Loans and Mortgages” for common questions relating to credit record)

C1. My credit card has been used for an unauthorized transaction. Do I have to bear the loss? [Answer]

C2. What should I do if I see an unauthorized transaction on my monthly credit card statement? [Answer]

C3. Are banks responsible for checking the transaction amount charged to a credit card account against the invoice amount? [Answer]

C4. Is there a cap on the credit card interest? [Answer]

C5. Can my credit card issuer increase my interest rate even if I have not defaulted on payments, and what can I do? [Answer]

C6. What does my credit limit mean? How is its level determined? [Answer]

C7. Are there any regulations on placing a cap on student credit card limits? [Answer]

C8. I am currently making payments to a merchant by credit card direct debit authorization (DDA) every month. I now want to cancel the DDA but the credit card issuer told me that it could not take my instruction and cancel the DDA. What can I do? [Answer]

C9. What is credit card “chargeback protection”? [Answer]

C10. Are there any requirements on the font size of credit card terms and conditions? [Answer]

C11. I have been making "Minimum Payments" in the past few months. However, I have paid up the balance as shown on the monthly statement in full last month, why does my bank still charge me interest in the current month? [Answer]

D. Debt Collection

D1. The debt collection agency of the bank I am using employs harassment and improper debt collection tactics. What can I do? [Answer]

D2. Can debt collectors tell other people about my debt situation? [Answer]

D3. Can banks recover debts from third parties including referees, family members or friends of the debtors? [Answer]

D4. Does my bank need to give me advance notice before engaging a debt collection agency to collect the debt from me? [Answer]

D5. The bank I am using has charged me for the costs and expenses they have incurred in collecting the debt from me. Is it allowed to do that? [Answer]

D6. Can the bank I use engage more than one debt collection agency to collect the debt from me? [Answer]

D7. Is the bank I use allowed to chase my debt after the debt was written off over seven years? [Answer]

E. Deposit Protection Scheme

E1. What is the protection limit under the DPS? [Answer]

E2. Which types of institutions are members of the DPS? [Answer]

E3. What is the scope of protection? [Answer]

F. E-banking

F1. Why do I have to provide my mobile number to banks for conducting high-risk transactions (e.g. making fund transfer to a third-party account) via Internet banking? [Answer]

F2. I received a notification e-mail from the bank I use saying that I have to login my Internet banking account to access my monthly e-statement. Why is it necessary? [Answer]

F3. Does the HKMA have any specific preference on which two-factor authentication mechanisms that banks should adopt to authenticate their customers to conduct high-risk Internet banking transactions? [Answer]

F4. Given the technological landscape relating to the provision of Internet services is ever changing and fraudster may become smarter over time, is it still safe to use Internet banking? [Answer]

G. Fraud Cases

G1. Do I need to pay financial insurance or transfer fees for money transfer from Hong Kong to elsewhere? [Answer]

G2. Can you verify if I need to deposit an advance fee into a designated bank account before I can get the lottery money which I was told to have won? [Answer]

G3. What should I do if I received suspected fraudulent bank e-mails or phone calls, or came across suspected fraudulent bank websites? [Answer]

H. Interest Rates and Exchange Rates

H1. What is an annualised percentage rate (APR)? [Answer]

H2. How are annualised percentage rates (APRs) calculated? [Answer]

H3. How can I know the annualised percentage rates (APRs) of banking products? [Answer]

H4. What is the maximum annualised percentage rate (APR) permitted by the HKMA? [Answer]

H5. How can I know the basis on which a bank calculates the interest for my loan? [Answer]

H6. Where can I find the historical interest rates/ exchange rates data? [Answer]

I. Investment Services

I1. Who regulates banks and their staff engaging in the sale of investment products? How are they supervised? [Answer]

I2. Are bank customers subject to the same investor protection as compared with customers of brokers? [Answer]

I3. Are there different treatments between retail banking customers and private banking customers? Why? [Answer]

I4. How does a customer know if a bank and / or its staff is eligible to sell investment products to customers? [Answer]

I5. What are the key points that an investor should take note before making an investment decision? [Answer]

I6. How can I claim my stocks for which a bank is a nominee or custodian when the bank goes bankrupt? [Answer]

I7. How are the interests of aged or inexperienced investors protected in purchasing investment products through banks? [Answer]

I8. Are all investment products offered by banks subject to a pre-investment cooling-off period? [Answer]

I9. Why am I requested by a bank to complete the risk profile assessment before buying an investment product? Is such assessment required before conducting each and every transaction? [Answer]

I10. Why do retail banks audio-record risk profile assessment and selling process of investment products? Do they have to audio-record every risk profile assessment and the selling process of each and every purchase of an investment product? [Answer]

I11. Can an investor buy an investment product with a risk rating that is higher than his / her risk tolerance level? [Answer]

I12. Can a bank simply execute an investor's purchase order if he/she has a specific investment product in mind?[Answer]

J. Loans and Mortgages

J1: What are the prudential measures introduced by the HKMA for property mortgage loans? [Answer]

J2. The mortgage loan granted by my bank is lower than what I would like to apply for. Why is that so? [Answer]

J3. My bank says that it needs to assess my repayment ability before deciding on whether to approve my mortgage application. What are the common approaches adopted by banks in assessing the repayment ability of mortgage applicants? [Answer]

J4. My loan application is rejected by a bank. Can I complain to the HKMA? Can the HKMA help me get my loan? [Answer]

J5. What is the purpose of “positive mortgage data sharing” (PMDS)? [Answer]

J6. How long will my credit data and bankruptcy record be retained by the Credit Reference Agency (CRA)? [Answer]

J7. How can I check my personal credit record held by the Credit Reference Agency (CRA)? [Answer]

J8. What should I do if I discover that my credit records held by the Credit Reference Agency (CRA) are not correct? [Answer]

J9. What should I do if I want to delete my credit record from the Credit Reference Agency (CRA) database? [Answer]

J10. Do I save interest expenses by making early repayment of personal instalment loan? [Answer]

K. Strengthening Security Controls for ATM Services

K1: Why is there a need to upgrade the ATM magnetic stripe card to new ATM chip card? What's in it for me? [Answer]

K2: If I forgot to activate the overseas cash withdrawal capability of my card before I leave Hong Kong, does it mean I will not have access to cash withdrawal from ATMs outside Hong Kong? [Answer]

K3: Do I have to pay for this card enhancement? [Answer]

K4: Can I activate the ATM card’s overseas ATM cash withdrawal capability and set the valid period to "perpetual" so that I don't have to activate my card everytime I am on the road? This will provide convenience to frequent travelers, and people studying or working outside Hong Kong. [Answer]

K5: I have several ATM cards. Are they being replaced at the same time? Can I just activate once for all my ATM cards instead of activating several times? [Answer]

K6: Can I still use my ATM cards in hand outside Hong Kong after 1 March 2013? Or all old cards should have been replaced by then? [Answer]

 

The answers below should not be regarded as a substitute for obtaining professional or legal advice.

A. Account Operation

(including general questions on banking services, terms and conditions, and fees and charges)

 

A1: Are there any guidelines of the HKMA governing bank’s account opening for customers?

Banks are required to follow the requirements stipulated in the Anti-Money Laundering and Counter Terrorist Financing (Financial Institutions) Ordinance and Guideline when opening bank accounts for their customers.  

 

A2: Can banks ask corporate customers to provide information of its shareholders?

According to the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance and Guideline, banks are required to identify and taking reasonable measures to verify the identity of the beneficial owner of corporate customers so that the bank is satisfied that it knows who the beneficial owner is, including measures to enable the bank to understand the ownership and control structure of the corporate customer. As such, banks are required to ask corporate customers to provide information of its shareholders.

 

A3: Can banks impose nationality restrictions on customers when they open a bank account?

The HKMA circulates from time to time statements, for example, those issued by Financial Action Task Force (FATF) highlighting concerns of the international community with the AML/CFT risks emanating from certain jurisdictions and requests banks to take appropriate measures to address such risks. However, the HKMA has NOT imposed any requirements on banks to prohibit the establishment of banking relations with individuals connected with such jurisdictions. According to the AML Guideline (paragraph 4.1.6) issued by the HKMA, banks should adopt a balanced and common sense approach with regard to customers connected with jurisdictions which do not or insufficiently apply the FATF recommendations. While extra care may well be justified in such cases, in general, it is not a requirement that banks should refuse to do any business with such customers. Rather, banks should weigh all the circumstances of the particular situation and assess whether there is a higher than normal risk of money laundering / terrorist financing.

 

A4: Can a bank close my account?

Either a customer or an authorized institution may close an account at any time subject to any specific terms and conditions that may apply. However, according to the Code of Banking Practice (PDF File, 181KB), an authorized institution should give reasonable notice to the customer before closing an account, except under exceptional circumstances, for example, where the account is being used for criminal activities.

 

A5: Can I get monthly account statements from banks?

According to the Code of Banking Practice (PDF File, 181KB), an authorized institution should provide account statements to a customer at monthly intervals unless, (a) a passbook or other record of transactions is provided; (b) there has been no transaction on the account since the last statement; or (c) otherwise agreed with the customers.

 

A6: Can a bank change the Terms and Conditions without giving any notice?

According to the Code of Banking Practice (PDF File, 181KB), authorized institutions should give customers 30 days’ notice before any variation of the terms and conditions which affects fees and charges and the liabilities or obligations of customers takes effect. For all other variations, authorized institutions should give customers reasonable notice before such variation takes effect.

 

A7: Would I be charged by banks for provision of administrative services, such as photocopying and printing?

It is authorized institutions’ commercial decision on whether or not to apply fees and charges on their banking services, and if so, the level of such fees and charges. Nonetheless, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should make readily available to customers details of the fees and charges payable in connection with banking services provided.

 

A8: My bank account has been inactive for some time. Would I be charged?

It is authorized institutions’ commercial decision on whether or not to apply charges on dormant accounts. Nonetheless, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should give 14 days’ prior notice to customers when a charge accrues on dormant accounts for the first time, and advise them of what can be done to avoid such charges or where they can obtain such information.

 

A9: Can banks change the level of fees and charges?

The level of fees and charges on banking services is authorized institutions’ commercial decision. However, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should give at least 30 days’ notice to affected customers before any changes in the level of fees and charges (including any change in the basis on which fees and charges are determined) take effect, unless such changes are not within their control. These requirements aim to provide customers with adequate information which enables them to make informed decisions in selecting banking services most suitable for them.

 

A10: I have low balance in my bank account. Why does the HKMA allow banks to charge a low-balance fee?

It is authorized institutions’ commercial decision on whether or not to implement minimum balance requirement on customers’ accounts and levy charges on accounts with balance falling below the minimum balance requirement. However, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should make readily available to customers information on the minimum balance requirement and the charges payable if the account balance falls below the requirement. The HKMA always encourages banks to consider the public need for banking services while operating on commercial principles. Most banks have policies in place to exempt certain customer groups (such as senior citizens and social welfare recipients) from low-balance fees. You can contact your bank to check if it has such waiver policy.

 

A11: There is no bank branch near where I live. Can the HKMA require a bank to open a branch there?

It is banks’ commercial decision on whether or not to open a branch in a district. Nonetheless, the HKMA always encourages banks to consider the public need for banking services while operating on commercial principles.

 

C. Credit Cards

(Please refer to Section J “Loans and Mortgages” for common questions relating to credit record)

 

C1: My credit card has been used for an unauthorized transaction. Do I have to bear the loss?

You may have to bear the loss if your credit card has been used for an unauthorized transaction before you reported to the card issuer that your card or personal identification number (PIN) has been lost or stolen or that someone else knows the PIN. You may also be held liable for the losses if you have acted fraudulently, with gross negligence or have failed to inform the card issuer as soon as reasonably practicable after having found that your card has been lost or stolen. This may apply to losses caused by your failure to follow the measures which you should take to safeguard your card or PIN as advised by the card issuer.

Provided that you have not acted fraudulently, with gross negligence or have not otherwise failed to inform the card issuer as soon as reasonably practicable after having found that your card or PIN has been lost or stolen, according to the Code of Banking Practice (PDF File, 181KB), the maximum liability for such credit card loss should be confined to a limit specified by the card issuer, which should not exceed HK$500. The application of this limit is confined to loss specifically related to your credit card account and does not cover cash advances.

 

C2: What should I do if I see an unauthorized transaction on my monthly credit card statement?

You should report the unauthorized transaction to the card issuer no later than 60 days from the statement date. According to the Code of Banking Practice (PDF File, 181KB), if you fail to report the unauthorized transaction within that period, the card issuer can reserve the right to regard the statement as conclusive and you may have to be held responsible for the unauthorized transaction.

 

C3: Are banks responsible for checking the transaction amount charged to a credit card account against the invoice amount?

Cardholders are responsible for examining their statements of credit card accounts and report any unauthorized or irregular transactions to the card issuers. Please also refer to the answer to Question C2 above.

 

C4: Is there a cap on the credit card interest?

Authorized institutions are exempt from the Money Lenders Ordinance (Chapter 163) so that the interest rates they charge are not restricted. However, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should not charge customers extortionate interest rates. If the annualised percentage rates (APRs) charged by them and calculated in accordance with the method set out in the relevant guidelines issued by the industry associations exceed the level which is presumed to be extortionate under the Money Lenders Ordinance (currently 48%), they should be able to justify why such high interest is not unreasonable or unfair. Unless justified by exceptional monetary conditions, the APRs thus calculated should not exceed the legal limit (currently 60%) as stated in the Money Lenders Ordinance.

 

C5: Can my credit card issuer increase my interest rate even if I have not defaulted on payments, and what can I do?

There may be a term in your credit card contract that allows the credit card issuer to increase the interest rate applicable to your credit card account even if you have not missed a payment. However, your credit card issuer must give at least 60 days’ notice for you to tell them that you want to reject the increase in interest rate by closing your credit card account. If you opt to close your credit card account, you should be given a reasonable period to repay your balance at the existing interest rate, with a repayment method not less beneficial to you than your current repayment method.

 

C6: What does my credit limit mean? How is its level determined?

The term “credit limit” generally refers to the maximum amount set by a card-issuing institution for a card-holder within which the card-holder may use the credit card to purchase good and services on credit or obtain cash advances. Regarding credit limit assignment, please refer to Section 4.6 of the Supervisory Policy Manual module CR-S-5 "Credit card business" (PDF File, 733KB) for details.

 

C7: Are there any regulations on placing a cap on student credit card limits?

As part of the credit card reform, card issuers have introduced a cap of HK$10,000 (applicable to new cards only) on the credit card limit granted to students in an institution of higher education, unless the student has submitted a written application with financial information demonstrating his/her independent ability to repay the proposed extension of credit.

 

C8: I am currently making payments to a merchant by credit card direct debit authorization (DDA) every month. I now want to cancel the DDA but the credit card issuer told me that it could not take my instruction and cancel the DDA. What can I do?

The credit card DDAs in connection with contracts entered into with merchants are given directly to the merchants (and not to the credit card issuer). Accordingly, a request for cancellation of a DDA should be made to the merchant. You can give the merchant a written instruction to cancel the authorization. If the DDA is still not cancelled, you can provide a copy of the cancellation instruction to your credit card issuer, and seek its help to contact the merchant to seek reimbursement of the disputed charge and / or cancellation of the authorization in dispute (as the case may be).

 

C9: What is credit card “chargeback protection”?

Generally speaking, where consumers use credit cards to make lump-sum payments for goods and services and have disputes over the transactions later on (e.g. the service purchased is not available as the merchant has gone out of business, the goods purchased do not match the description, etc.), consumers can request for refunds of their payment through the credit card chargeback mechanisms of the respective credit card associations.

Consumers may apply to their card issuers to raise chargeback (i.e. refund) requests against the disputed transactions. After obtaining the details of the disputed transactions from consumers, the card issuers will, through the credit card associations and in accordance with their rules and criteria, raise disputes and chargeback requests for the consumers against the relevant transactions to the merchant acquirers. Consumers may check with the card issuers about application procedures for raising chargeback requests and the chargeback processes of respective credit card associations. The general (simplified) process flow of the chargeback mechanism is shown in the attached diagram.

Diagram: General (simplified) process flow of the chargeback mechanism

Notes (5-8): A merchant acquirer or a merchant may, in accordance with the rules of the respective credit card association, accept or reject a chargeback request. Where the merchant acquirer or the merchant rejects the chargeback request but the card issuer or consumer does not agree with the decision, the card issuer may in accordance with the rules of the respective credit card association submit the disputed transaction to the credit card association for arbitration.

Consumers should note that, chargeback requests raised by card-issuers on customers’ behalf are subject to the rules of the respective card associations (including the chargeback time limits within which consumers must file the requests, information showing a dispute is valid, etc.). Chargeback requests which do not fulfil the relevant requirements may be rejected. Consumers can visit the webpages of card issuers for relevant information or directly contact the card issuers to understand the details of chargeback protection and the relevant rules that may apply to a specific credit card transaction.

 

C10: Are there any requirements on the font size of credit card terms and conditions?

Under the Code of Banking Practice (PDF File, 181KB), card issuers are required to print major terms and conditions in the application forms for card services in clear and legible type and in a font size that facilitates easy reading.

As part of the credit card reform, card issuers are required to disclose terms and conditions in a reasonable layout and font size that is readily readable. Annualised percentage rates for purchases and cash advances and fees and charges should be disclosed prominently and conspicuously and in a font size that is sufficiently larger than that for the other terms and conditions. This reform measure will take effect within 2012.

 

C11: I have been making "Minimum Payments" in the past few months. However, I have paid up the balance as shown on the monthly statement in full last month, why does my bank still charge me interest in the current month?

In general, if customers do not repay the balance in full on or before the payment due date, they will lose the "interest-free" grace period (note: for some card issuers, the "interest-free" grace period is only applicable to retail purchases but not cash advance). This means that they will be immediately subject to interests on the unpaid portion of the balance as well as any new transactions: interest on the unpaid portion of the balance will be charged from the previous statement date to the current statement date, while interest on any new transactions will be charged from the transaction / posting date of the transaction to the current statement date. Even though the customers subsequently repay the "balance" as stated on the statement in full (including the interests charged for the current billing cycle), some card issuers will still charge the customers interest in the next billing cycle: interest on the full "balance" calculated from the statement date to the date the customers repaid the "balance" in full. Each credit card issuer may have a slightly different approach in calculating credit card interest rates. You can call up your credit card issuer to understand how the interest on your credit card is calculated and ask them for the exact dollar amount you should repay on the payment due date (or earlier) in order to fully settle your outstanding balance.

D. Debt Collection

 

D1: The debt collection agency of the bank I am using employs harassment and improper debt collection tactics. What can I do?

According to the Code of Banking Practice (CoBP)(PDF File, 181KB), authorized institutions should require their debt collection agencies not to employ harassment or improper debt collection tactics.

If you find the tactics used by the debt collection agency not in line with requirements as specified in the CoBP, you can make a complaint to the authorized institution (see list of authorized institutions’ contact persons for handling customer complaints (PDF File, 406KB)). If you are not satisfied with the manner in which the authorized institution handles your complaint, you may seek help from our Complaint Processing Centre (see Frequently Asked Questions - Complaints About Banks).

 

D2: Can debt collectors tell other people about my debt situation?

According to the Code of Banking Practice (PDF File, 181KB), authorized institutions should require their debt collection agencies to act within the law and observe a strict duty of confidentiality in respect of customer information.

 

D3: Can banks recover debts from third parties including referees, family members or friends of the debtors?

According to the Code of Banking Practice (PDF File, 181KB), authorized institutions and their debt collection agencies should not try to recover debts, directly or indirectly, from third parties including referees, family members or friends of the debtors if these persons have not entered into a formal contractual agreement with the authorized institutions to guarantee the liabilities of the debtors.

 

D4: Does my bank need to give me advance notice before engaging a debt collection agency to collect the debt from me?

Yes. According to the Code of Banking Practice (PDF File, 181KB), authorized institutions should give the customer advance written notice (sent to the last known address of the customer) of their intention to commission a debt collection agency to collect an overdue amount owed to the authorized institution. The written notice should include the following information: -

(a) the overdue amount repayable by the customer;

(b) the length of time the customer has been in default;

(c) the contact telephone number of the institution’s debt recovery unit which is responsible for overseeing the collection of the customer’s debt to the institution;

(d) the extent to which the customer will be liable to reimburse the institution the costs and expenses incurred in the debt recovery process (if the institution requires the customer to indemnify it for such costs and expenses); and

(e) that the customer should in the first instance report improper debt recovery actions taken by the debt collection agency to the institution.

 

D5: The bank I am using has charged me for the costs and expenses they have incurred in collecting the debt from me. Is it allowed to do that?

Authorized institutions intending to use debt collection agencies should specify in the terms and conditions of credit or credit card facilities that they may employ third party agencies to collect overdue amounts owed by the customers. Authorized institutions which reserve the right to require customers to indemnify them, in whole or in part, for the costs and expenses they incur in the debt recovery process should include a warning clause to that effect in the terms and conditions.

 

D6: Can the bank I use engage more than one debt collection agency to collect the debt from me?

According to the Code of Banking Practice (PDF File, 181KB), authorized institutions should not engage more than one debt collection agency to pursue the same debt in one jurisdiction at the same time.

 

D7: Is the bank I use allowed to chase my debt after the debt was written off over seven years?

The Supervisory Policy Manual (SPM) sets out the Hong Kong Monetary Authority (HKMA)'s latest supervisory policies and practices, the minimum standards Authorized Institutions (AIs) are expected to attain in order to satisfy the requirements of the Banking Ordinance and the recommendations on best practices that AIs should aim to achieve. You may refer to the SPM CR-G-10 on “Problem Credit Management” (PDF File, 104KB), in particular paragraph 4.1, which clearly states that: "Debt recovery efforts should not cease after an account has been written off. A process should be in place to continue collection efforts in order to seek recovery."

Please note that the above information shall not constitute a legal advice from the HKMA. You are suggested to consult your legal advisor as deemed appropriate.

E. Deposit Protection Scheme

 

E1: What is the protection limit under the DPS?

The DPS protects eligible deposits held with members of the Scheme (Scheme members) up to a limit of HK$500,000 per depositor per bank.

 

E2: Which types of institutions are members of the DPS?

Unless exempted by the Hong Kong Deposit Protection Board (the Board), all licensed banks are members of the DPS. Scheme members must display the DPS membership sign prominently at their places of business.

 

E3: What is the scope of protection?

Most of the commonly held deposits with Scheme members, whether denominated in Hong Kong dollar, Renminbi or any other currency, and held by an individual or a company, qualify for protection under the DPS. Secured deposits also qualify for protection. However, certain types of deposits are not protected, for example, structured deposits (such as foreign currency-linked and equity-linked deposits), time deposits with an original maturity longer than five years, bearer instruments and offshore deposits.

To find out more about the DPS, please visit the Board’s website (http://www.dps.org.hk/) or call the Board’s hotline (852) 1831 831.

F. E-banking

 

F1: Why do I have to provide my mobile number to banks for conducting high-risk transactions (e.g. making fund transfer to a third-party account) via Internet banking?

Banks in Hong Kong are required to have in place adequate security controls over their Internet banking services. According to SPM TM-E-1 on “Risk Management of E-banking” issued by the HKMA in 2015, one of the important security measures is that banks are required to notify their customers immediately via an effective alternative channel such as SMS message after completing an online high-risk transaction, and the notification message should contain the transaction details.

This notification mechanism is aimed at facilitating the customers in detecting any suspected unauthorized transactions so that they could report them to their bank immediately for prompt actions e.g. suspending the fund from being transferred to overseas account (where possible). Notification through SMS messages is considered to be more timely and effective. As such, banks in general will require their customers to provide their mobile phone number to the banks if the customers choose to enroll in Internet banking services for conducting high-risk transactions.

Alternatively, if customers choose not to provide mobile phone number to the banks, the customers could still conduct the high-risk transactions through other channels such as at branches or by post (where appropriate).

Further information and advice on Internet banking safety may be found on the “Consumer Education Programme” webpage.

 

F2: I received a notification e-mail from the bank I use saying that I have to login my Internet banking account to access my monthly e-statement. Why is it necessary?

According to the Supervisory Policy Manual on General Principles for Technology Risk Management and related circulars issued by the HKMA, banks are required to implement adequate IT controls to ensure confidentiality and integrity of information, and to protect the information in accordance with the level of risk present and envisaged. In particular, banks are required to protect confidentiality of customer data. Some of the banks may require their customers to login their Internet banking accounts to access the monthly e-statements. The customer login process at Internet banking can be used as a way to authenticate the identity of the customer, and therefore protecting the customer information (including e-statements) stored at the bank’s systems.

The HKMA adheres great importance to data security particularly customer data protection and will continue to work with the banking industry to monitor the developments and trend of technology and information security, and strengthen the security measures, where appropriate, to protect the integrity and confidentiality of customer information.

Further information and advice on Internet banking safety may be found on the “Consumer Education Programme” webpage.

 

F3: Does the HKMA have any specific preference on which two-factor authentication mechanisms that banks should adopt to authenticate their customers to conduct high-risk Internet banking transactions?

The HKMA's supervisory objective is to establish and maintain a safe and sound environment for the development of e-banking in Hong Kong without standing in the way of progress. The HKMA believes that maintaining technology neutrality is crucial for allowing banks to have the flexibility to choose and implement technologies that are appropriate to their e-banking services. Nevertheless, banks are required to adhere to the "fit for purpose" principle when implementing the system i.e. the technical implementation of the security measures and other controls adopted by banks for their electronic banking systems is required to be commensurate with the risks associated with the types and amounts of transactions allowed, the electronic delivery channels adopted and the risk management systems of individual banks.

As such, in respect of two-factor authentication, banks are required to select reliable and effective authentication techniques to authenticate the identity and authority of their e-banking customers. In general, banks are required to employ stronger customer authentication for authenticating their customers' transactions with higher risk. Banks need to evaluate carefully other aspects, including whether a particular authentication method is sufficiently mature.

Banks are expected to continue to review their security measures in place and to enhance the controls where appropriate on an ongoing basis, taking into account the trend and development of e-banking and information security.

Further information and advice on Internet banking safety may be found on the “Consumer Education Programme” webpage.

 

F4: Given the technological landscape relating to the provision of Internet services is ever changing and fraudster may become smarter over time, is it still safe to use Internet banking?

Internet banking services in Hong Kong are safe to use so long as both the banks and the customers have taken appropriate precautionary measures. Bank customers should stay vigilant to potential security issues e.g. computer virus, Trojan Horse attacks on their personal computers. Customers should install personal firewall and anti-virus software in their personal computers and keep them up-to-date. They should also avoid visiting or downloading software from suspicious websites, and be wary of opening attachments in e-mails from unfamiliar sources. Bank customers who discover any suspicious webpage or any unauthorized transactions in their bank accounts should contact their banks immediately. Further information and advice on Internet banking safety may be found on the “Consumer Education Programme” webpage and on the websites of banks.

G. Fraud Cases

 

G1: Do I need to pay financial insurance or transfer fees for money transfer from Hong Kong to elsewhere?

According to Article 112 of the Basic Law, "No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. Markets for foreign exchange, gold, securities, futures and the like shall continue. The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region." It means that there is no restriction on money transfer in Hong Kong and the HKMA does not impose charges of any kind on money transfer.

 

G2: Can you verify if I need to deposit an advance fee into a designated bank account before I can get the lottery money which I was told to have won?

We suspect that you have encountered a fraud case. The HKMA is the banking regulator in Hong Kong and we have no relationship with any kind of lottery activity.

In addition, according to Article 112 of the Basic Law, "No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. Markets for foreign exchange, gold, securities, futures and the like shall continue. The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region." It means that there is no restriction on transfer of money in Hong Kong and the government does not demand for any kind of charges on money transfer.

If you suspect that fraudulent activities are involved, you may wish to report the case to the local police station or the Commercial Crime Bureau of the Hong Kong Police Force direct.

 

G3: What should I do if I received suspected fraudulent bank e-mails or phone calls, or came across suspected fraudulent bank websites?

If you receive any suspicious messages or identify any suspicious websites that purport to be related to banks, please contact the bank concerned and the police (either a local police station or the Commercial Crime Bureau) to report your case.

H. Interest Rates and Exchange Rates

 

H1: What is an annualised percentage rate (APR)?

In general terms, an APR is a reference rate which includes the interest rate and other fees and charges of a banking product expressed as an annualised rate. The Code of Banking Practice (PDF File, 181KB) requires authorized institutions to quote APRs of banking products to facilitate comparison between different charging structures.

 

H2: How are annualised percentage rates (APRs) calculated?

APRs are calculated using the “Net Present Value” method specified in the relevant guidelines issued by the industry associations. Authorized institutions adopt the same set of rules and assumptions to provide a consistent basis of calculation.

 

H3: How can I know the annualised percentage rates (APRs) of banking products?

According to the Code of Banking Practice (PDF File, 181KB), authorized institutions should where relevant quote APRs of banking products. In particular, authorized institutions should, where relevant, indicate the APRs in any advertising and promotional materials for banking products which includes references to interest rates. Authorized institutions should also be prepared to respond to your inquiries concerning APRs and the methods of calculation.

 

H4: What is the maximum annualised percentage rate (APR) permitted by the HKMA?

Authorized institutions are exempt from the Money Lenders Ordinance (Chapter 163) so that the interest rates they charge are not restricted. However, according to the Code of Banking Practice (PDF File, 181KB), authorized institutions should not charge customers extortionate interest rates. If the APRs charged by them and calculated in accordance with the method set out in the relevant guidelines issued by the industry associations exceed the level which is presumed to be extortionate under the Money Lenders Ordinance (currently 48%), they should be able to justify why such high interest is not unreasonable or unfair. Unless justified by exceptional monetary conditions, the APRs thus calculated should not exceed the legal limit (currently 60%) as stated in the Money Lenders Ordinance.

 

H5: How can I know the basis on which a bank calculates the interest for my loan?

According to the Code of Banking Practice (PDF File, 181KB), an authorized institution should be prepared to answer your queries relating to the terms and conditions of banking products. An authorized institution should also provide the basis on which the interest rate of your loan is determined upon your application for the loan or in a subsequent offer.

 

H6. Where can I find the historical interest rates/ exchange rates data?

You may wish to refer to Section 6: Exchange rates and interest rates of the Monthly Statistical Bulletin.

I. Investment Services

 

I1: Who regulates banks and their staff engaging in the sale of investment products? How are they supervised?

The Securities and Futures Commission, as the lead regulator of the securities market, is responsible for setting the standards, through rules, codes and guidelines issued under the Securities and Futures Ordinance; while the HKMA acts as the frontline supervisor of the securities business of banks and ensures that banks and their staff conduct the sale of investment products in accordance with the relevant regulatory requirements and standards.

The HKMA is responsible for the day-to-day supervision of banks’ securities activities. The supervisory approach includes issuing circulars and guidelines, conducting regular on-site examinations to check banks’ compliance, and performing off-site surveillance such as analysing the results of periodic returns and surveys submitted by banks.

 

I2: Are bank customers subject to the same investor protection as compared with customers of brokers?

The Securities and Futures Commission sets out the principles and minimum regulatory requirements for all intermediaries (including banks and brokers). The HKMA, being the frontline regulator of banks’ conduct in relation to the sale of investment products, may impose enhanced measures or provide guidance on the expected standards to strike a proper balance between appropriate protection of bank customers and a user-friendly regulatory framework, taking into account market developments, supervisory observations, nature of the banks’ clientele and mode of operations.

 

I3: Are there different treatments between retail banking customers and private banking customers? Why?

Having regard to market development and the growing public expectation for better protection of retail banking customers, the HKMA has required retail banks to implement a number of enhanced measures, including the following:

i. audio recording of customer risk profile assessment and sale process that involves complex products or risk-mismatch;

ii. physical segregation of investment business from general banking business;

iii. mystery shopping exercise to test check sale practices;

iv. pre-investment cooling-off period for derivative products that are not listed on an exchange in Hong Kong and for debentures that are not listed on an exchange in Hong Kong and have any of the following features (extendable, exchangeable, convertible, and/ or with non-viability loss absorption feature); and

v. Important Facts Statement to provide clear and concise summary of key product features and risks of currency-linked and interest rate-linked investment products.

In view of the differences in nature of clientele and mode of operations of private banking business, the HKMA and the private banking industry worked out a “flexible version” (PDF File, 240KB) of the enhanced measures to facilitate the private banking industry’s compliance with regulatory requirements and standards governing sale of investment products whilst ensuring an appropriate degree of investor protection.

 

I4: How does a customer know if a bank and / or its staff is eligible to sell investment products to customers?

Apart from enquiring the bank and / or its staff directly, a customer may also check against the online public registers maintained by the regulators to ascertain whether a bank is a “registered institution” as well as eligibility and other particulars of its staff who are registered as “relevant individuals”.

 

I5: What are the key points that an investor should take note before making an investment decision?

An investor should not rush into an investment but instead should be sure he/she understands the nature and risks of the investment and has the ability to bear potential losses before making an investment decision. Below are some key points:

  • Provide the necessary information accurately (e.g. investment objectives, investment experience, financial situation, investment horizon) and complete customer risk profiling with your intermediaries properly
  • Focus not only on potential returns and past performance, but also on the product features and risks. Diversify your investments to avoid concentration risk
  • Spend time to read the product documents such as prospectus and do not rely solely on marketing materials and / or key facts statements which only provide highlights
  • Ask questions and seek clarification from your intermediaries if in doubt. Make sure you fully understand the features and risks of the investment products you are going to invest, as well as why and how those products are suitable for you (e.g. the risk-return profiles match your personal circumstances)
  • Know your rights and exercise them, for example, a less sophisticated investor is given at least two calendar days to consider the appropriateness of derivative products that are not listed on an exchange in Hong Kong, and a vulnerable customer (e.g. aged 65 or above, persons with a low degree of financial literacy) may choose to bring along a companion to witness the investment products sale process and / or have a second frontline staff to handle the sale of investment products.
  • Request intermediaries to introduce other investment products which are also suitable for you so that you can have more choices to consider
  • Make sure you understand the ramifications before signing any documents (e.g. the acknowledgement of proceeding with a risk-mismatched transaction).

 

I6: How can I claim my stocks for which a bank is a nominee or custodian when the bank goes bankrupt?

You may contact the Investor Compensation Company Limited, a wholly-owned subsidiary of the Securities and Futures Commission established for the administration of claims by customers of intermediaries, including registered institutions and brokers, against the Investor Compensation Fund. The contact details are:

Tel: (852) 2523 7382
Fax: (852) 2523 7389
E-mail: icc@hkicc.org.hk
Address: 21/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong

 

I7: How are the interests of aged or inexperienced investors protected in purchasing investment products through banks?

For sale of investment products to vulnerable customers (e.g. aged 65 or above, persons with a low degree of financial literacy), banks should implement additional precautionary measures such as the following:

  • allow them to choose during the initial transaction whether they would like to bring along a companion to witness the sale process, and / or have a second frontline staff to handle the sale; and
  • advise them to avoid hasty decisions.

Regarding the sale of (i) derivative products that are not listed on an exchange in Hong Kong; or (ii) debentures that are not listed on an exchange in Hong Kong and have any of the following features (extendable, exchangeable, convertible, and/ or with non-viability loss absorption feature), banks should give the elderly or first-time buyers with high asset concentration a pre-investment cooling-off period, i.e. at least two calendar days to understand the products, consider the appropriateness of the investment, and if necessary, consult family members and friends before placing an order.

 

I8: Are all investment products offered by banks subject to a pre-investment cooling-off period?

No, the Pre-Investment Cooling-off Period (PICOP) arrangement is applicable only to the sale of derivative products that are not listed on an exchange in Hong Kong and to debentures that are not listed on an exchange in Hong Kong and have any of the following features (extendable, exchangeable, convertible, and/ or with non-viability loss absorption feature).

Under the PICOP arrangement, banks are required to give customers with less sophisticated understanding of such products, including first-time buyers with high asset concentration, at least two calendar days to understand the products, consider the appropriateness of the investment, and if necessary, consult family members and friends before order placement. For details, you may refer to the circular "Implementation of Pre-Investment Cooling-off Period for Retail Customers" (PDF File, 402KB) issued by the HKMA to authorized institutions on 20 May 2010.

 

I9: Why am I requested by a bank to complete the risk profile assessment before buying an investment product? Is such assessment required before conducting each and every transaction?

In order to recommend suitable investment product(s) to you, banks are required to seek and take into consideration your relevant information including investment objectives, investment experience and knowledge, financial situation, investment horizon and risk tolerance etc. A common way to collect and document such information is by conducting a customer risk profile assessment generally in the form of questionnaire.

You do not need to complete a risk profile assessment before conducting each and every transaction. If you have already completed an assessment with the bank before and the results are still valid (validity usually lasts for one or two years depending on different banks’ policies), the bank can proceed on recommending suitable investment product(s) to you without carrying out risk profile assessment again. If you have significant changes in relevant information, you should inform the bank so as to update the assessment.

 

I10: Why do retail banks audio-record risk profile assessment and selling process of investment products? Do they have to audio-record every risk profile assessment and the selling process of each and every purchase of an investment product?

Audio-recording is an important investor protection measure. Audio-recording the risk profile assessment and the selling process can help ensure such processes are properly conducted (e.g. to guard against misrepresentation or omission in the profiling and risk disclosure processes). The audio record can also serve as important evidence in any customer complaints or disputes, and can facilitate regulators’ supervision of the business conduct and investigation of any customer complaints.

Not every risk profile assessment nor every purchase of an investment product requires audio-recording. While banks are required to audio-record the first-time face-to-face risk profile assessment process for retail customers, banks may provide other risk profiling channels, such as online assessment where audio-recording is not required. Also, banks may conduct subsequent regular review of customer risk profile online or via written confirmation with customers, where audio-recording is not applicable.

In general, banks do not need to audio-record face-to-face selling process of investment products for retail customers, unless the process involves risk-mismatch, products and product documents that are not authorized by the SFC, complex and high-yield bonds or derivatives.

 

I11: Can an investor buy an investment product with a risk rating that is higher than his / her risk tolerance level?

A bank may recommend a customer to buy an investment product with risk-mismatch, if it is suitable to the customer. For example, it may be suitable for a customer with a low or medium risk profile to buy a high risk investment product if the product only constitutes a small portion of the customer’s portfolio and could likely meet the investment objectives and other circumstances of the customer.

Where a bank does not consider it suitable to recommend an investment product with risk-mismatch but the customer requests to purchase it, the bank may execute the customer’s order provided that it documented the customer's reasons for the transaction.

 

I12: Can a bank simply execute an investor's purchase order if he/she has a specific investment product in mind?

In general, a bank can execute an investor’s purchase order for a specific investment product without involving any investment recommendation or solicitation from the bank.

However, if the product involves derivatives, the bank would need to adopt relevant investor protection measures, such as assessment of investor’s knowledge of derivatives, and implement pre-investment cooling-off period arrangement for certain derivative products. Further, if the investor has no knowledge of derivatives, the bank should warn the investor about the transaction and provide appropriate advice to the investor as to whether or not the transaction is suitable for him/her. For derivative products or leveraged transactions, the bank would also need to assure itself that the investor understands the nature and risks of the products and has sufficient net worth to be able to assume the risks and bear the potential losses of trading in such products.

J. Loans and Mortgages

 

J1: What are the prudential measures introduced by the HKMA for property mortgage loans?

The HKMA has introduced various rounds of prudential measures since October 2009 to enhance the risk management of banks in conducting property mortgage lending business and strengthen the resilience of the banking sector against any downturn in the property market. The measures included:

(1) tightening the maximum loan-to-value (LTV) ratio for property mortgage loans, which may pose higher risks to banks, such as:

  • mortgage loans for applicants with one or more pre-existing mortgages
  • mortgage loans for applicants whose income is mainly derived from outside of Hong Kong
  • mortgage loans for applicants based on their net worth for borrowing
  • mortgage loans for non-self use residential properties
  • mortgage loans for commercial and industrial properties
    •  

    (2) requiring banks to apply more prudent criteria to assess the repayment ability of mortgage applicants;

    (3) limiting the maximum loan tenor for all new property mortgage loans to 30 years and car park mortgage loans to 15 years;

    (4) requiring banks using Internal Ratings-Based Approach to calculate capital charges for credit risk to apply risk weight floors for their residential mortgage loans; and

    (5) requiring banks to share positive mortgage data.

     

    Please refer to the attached table regarding the details of the maximum LTV ratio and debt servicing ratio limit for property mortgage loans.

     

    J2: The mortgage loan granted by my bank is lower than what I would like to apply for. Why is that so?


    In general, it is the commercial decision of banks on whether and how much they will lend to borrowers. In making the decision, banks will consider a host of factors, such as repayment ability of borrowers and risk mitigating arrangements.

    However, in the case where activities engaged by banks could pose prudential issues and impact the banking stability in Hong Kong, the HKMA will issue guidelines requiring banks to adopt prudent standards and practices to strengthen their risk management.

    With regard to property mortgage lending, the HKMA is concerned about the increasing risk to banks in mortgage business given the continued rise in property prices, the exceptionally low interest rate environment, coupled with the highly uncertain external environment. The HKMA has therefore introduced various countercyclical macroprudential measures since October 2009 to enhance the resilience of the banking sector and avoid homebuyers from overstretching themselves. These measures, which focus on prudent loan-to-value ratio and robust assessment on borrowers’ repayment ability, are targeted on mortgage loans of higher risks.

    In introducing prudential measures, the HKMA has always strived to strike a balance to minimise the impact on end-users. First-time homebuyers of lower-value residential properties are generally not affected by the prudential measures.

     

    J3: My bank says that it needs to assess my repayment ability before deciding on whether to approve my mortgage application. What are the common approaches adopted by banks in assessing the repayment ability of mortgage applicants?

    There are two common approaches adopted by banks in assessing the repayment ability of mortgage applicants. These include:

    Debt servicing ratio – this is essentially the ratio of the monthly debt obligations of mortgage applicants to their monthly income. It is usually applicable to applicants with regular income. Under this approach, banks will request applicants to provide evidence of their income and indebtedness.

    Net asset value or asset-to-total debt obligation ratio – this is usually applicable to applicants who have difficulties in providing regular income proof, and rely on their net worth to demonstrate their repayment ability. Under this approach, banks will request applicants to provide evidence relating to their net assets and indebtedness.

     

    J4: My loan application is rejected by a bank. Can I complain to the HKMA? Can the HKMA help me get my loan?

    While we note your dissatisfaction in having your loan application declined by the bank, we hope you would appreciate that the HKMA is not in the position to interfere commercial decisions of individual banks, including judgment on whether or not to lend to a particular customer.

     

    J5: What is the purpose of “positive mortgage data sharing” (PMDS)?

    The purpose of “positive mortgage data sharing” is to enhance credit assessment of authorized institutions to facilitate prudent lending and more effective credit risk management by credit providers, thereby preventing over-borrowing by consumers and over-lending by credit providers. This is conducive to the general stability of the banking system in Hong Kong, which is crucial to the interest of depositors as well as the financial stability of Hong Kong as a whole.

    The HKMA expects authorized institutions to make full use of the PMDS scheme and to verify the mortgage count declared by mortgage loan applicants with the mortgage count information obtained from the Credit Reference Agency database.

     

    J6: How long will my credit data and bankruptcy record be retained by the Credit Reference Agency (CRA)?

    The data retention period of different types of consumer credit data that may be retained by a CRA is specified under the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data (PCPD). For account repayment data, the general rule on data retention is that such data may be retained by a CRA in its database for five years from the date of creation of such data or until the expiry of five years after account termination. However, there are certain exceptions. For example, if you have defaulted in repayment for a period in excess of 60 days, then such account default data may be retained until the expiry of five years after the amount in default is fully settled.

    For bankruptcy record, a CRA may collect this type of information from public sources for credit reporting purposes. The Code provides that public record data relating to a declaration or discharge of bankruptcy may be retained by a CRA in its database for a period of eight years from the relevant declaration of bankruptcy.

    For more information on data retention of other types of consumer credit data by a CRA, please refer to the Code. For any questions relating to the Code, please contact the PCPD direct. The contact information of the PCPD can be found on its website.

     

    J7: How can I check my personal credit record held by the Credit Reference Agency (CRA)?

    Any person can check his or her own credit record with the CRA. You may wish to contact your bank to find out more information about the CRA they have used, and the contact information of the CRA.

     

    J8: What should I do if I discover that my credit records held by the Credit Reference Agency (CRA) are not correct?

    You may make a data correction request with the CRA concerned. The CRA should handle your data correction request in accordance with the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data (PCPD) (clauses 3.19 and 3.20 of the Code refer).

    For more information, please refer to the Code. If you have any questions about the Code, you may wish to make an enquiry with the PCPD direct. The contact information of the PCPD can be found on its website.

     

    J9: What should I do if I want to delete my credit record from the Credit Reference Agency (CRA) database?

    In accordance with the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data, when you have settled your loan account, you have a right to instruct your lender to make a request to the CRA to delete the closed account data from its database. However, you should note that the right is conditional upon there having been, within 5 years immediately before account termination, no default in repayment for a period in excess of 60 days on the account and you have settled the account by full repayment (Clause 2.15 of the Code refers). For more information about deleting credit record from the CRA, please refer to the Code.

     

    J10: Do I save interest expenses by making early repayment of personal instalment loan?

    Generally speaking, the earlier a borrower makes loan repayment, the more outstanding interest payments are likely to be saved. Nevertheless, borrowers should consider the early repayment charges involved before deciding whether to pay off their loans early or not. Borrowers need to be aware that individual banks use different ways to apportion interest and principal in the monthly repayment amounts. Even though the monthly repayment amount is the same throughout the loan tenor, more interest will, in general, be included in earlier repayments, and less on principal. In other words, where a borrower has been making repayments as scheduled for some time, the amount of outstanding interest is likely to be small. If the borrower chooses to pay off the loan early at this point of time, the loss may outweigh the gain as the amount of interest saved may not be enough to cover the relevant charges for early repayment. As a smart bank customer, one should first check with the bank about the total amount involved in early repayment (including outstanding loan balance, early repayment charges and other fees, etc.) and the amount of outstanding interest. He/she should then compare different scenarios and consider carefully before making a decision of repaying early or not.

     

    K. Strengthening Security Controls for ATM Services

     

    K1: Why is there a need to upgrade the ATM magnetic stripe card to new ATM chip card? What's in it for me?

    Chip-based ATM technology offers greater security and protection to the data stored within the chip and therefore reduces the risk of unauthorized ATM transactions. As many ATMs outside Hong Kong are still using magnetic stripe technology, the new chip card will continue to feature a magnetic stripe to allow cardholders’ use outside Hong Kong. But enhanced security measures will be implemented to offer additional protection against unauthorized ATM transactions outside Hong Kong. The overseas ATM cash withdrawal capability for all ATM cards will be pre-set as “deactivated”, with effect from 1 March 2013. ATM cardholders are reminded to activate the overseas cash withdrawal capability before traveling, if they may need to withdraw cash from ATMs outside Hong Kong.

     

    K2: If I forgot to activate the overseas cash withdrawal capability of my card before I leave Hong Kong, does it mean I will not have access to cash withdrawal from ATMs outside Hong Kong?

    Cardholders who have not activated the overseas cash withdrawal capability of their ATM cards before leaving Hong Kong will have to resort to other means for activation before they could withdraw cash from ATMs outside Hong Kong. Cardholders can activate such capability via telephone (phone banking / call centre). A number of banks also offer additional channel(s) (e.g. Internet banking). While banks will communicate with their customers regarding the channels for activating overseas ATM cash withdrawal capability, cardholders are suggested to get in touch with their banks if in doubt.

     

    K3: Do I have to pay for this card enhancement?

    Banks will replace their ATM cards according to their individual schedules for the implementation of chip-based ATM technology. So long as cardholders follow the banks’ card replacement schedule, the banks do not plan to charge customers for the cost of card replacement.

     

    K4: Can I activate the ATM card’s overseas ATM cash withdrawal capability and set the valid period to "perpetual" so that I don't have to activate my card everytime I am on the road? This will provide convenience to frequent travelers, and people studying or working outside Hong Kong.

    Regarding the maximum expiry period, practices among the banks may vary, e.g. specific number of years such as one or three years, up to the expiration date of the card, or perpetual. Banks will communicate the details to their customers. Customers are reminded not to set the valid period longer than needed or to “perpetual” to avoid reducing the effectiveness of such security measure.

     

    K5: I have several ATM cards. Are they being replaced at the same time? Can I just activate once for all my ATM cards instead of activating several times?

    Banks will replace their ATM cards according to their individual schedules, and the ATM cards held by a customer may not necessarily be replaced at the same time. In general, overseas ATM cash withdrawal capability is activated at card level. Cardholders are suggested to get in touch with their banks if in doubt.

     

    K6: Can I still use my ATM cards in hand outside Hong Kong after 1 March 2013? Or all old cards should have been replaced by then?

    Banks are required to replace all the debit cards and credit cards which are linked to customers’ bank accounts by 31 March 2014, and all the credit cards which are not linked to customers’ bank accounts by the end of 2015. 1 March 2013 is just the effective date from which cardholders are required to activate overseas cash withdrawal capability if they may need to withdraw cash at ATMs outside Hong Kong.

     

    Back to "Frequently Asked Questions" main page.

    Back to Consumer Corner's "Frequently Asked Questions" main page

    Last revision date: 28 August 2017
    ABOUT THE HKMA
    The HKMA
    Tender Invitations
    Careers@HKMA
    Legislative Council Issues
    Links
    The HKMA Information Centre
    KEY FUNCTIONS
    Monetary Stability
    Banking Stability
    International Financial Centre
    Exchange Fund
    PUBLICATIONS & RESEARCH
    Annual Report
    Half-Yearly Monetary & Financial Stability Report
    Quarterly Bulletin
    HKMA Background Briefs
    Reference Materials
    Research
    MARKET DATA & STATISTICS
    CMU Bond Price Bulletin
    Economic & Financial Data for Hong Kong
    Monthly Statistical Bulletin
    Monetary Statistics
    KEY INFORMATION
    Press Releases
    Speeches
    Guidelines & Circulars
    Forthcoming Events
    inSight
    OTHER INFORMATION
    Account Opening
    Consumer Corner
    Consumer Education Programme
    Complaints about Banks
    Complaints about SVF Licensees
    Internet Banking
    Fraudulent Bank Websites, Phishing E-mails and Similar Scams
    Be Careful of Bogus Phone Calls and SMS Messages
    Authenticate the Callers and Bank Hotline Numbers
    Register of AIs & LROs
    Register of Securities Staff of AIs
    Register of SVF Licensees
    Investment Products Related to Lehman Brothers
    Photo Gallery