Money Past & Present

1¢, 5¢, 10¢ notes issued by the Hong Kong Government in 1941
1¢, 5¢, 10¢ notes issued by the Hong Kong Government in 1941.

Banks and banknotes

In 1895 the Bank Note Issue Ordinance tightened up the regulation of banknotes. From that year banks could only issue notes in Hong Kong with the permission of the Secretary of State, through the Governor. In 1935, with the creation of the Exchange Fund, banknotes from the three note-issuing banks were declared legal tender for the first time.

During the Japanese occupation of Hong Kong (December 1941 - August 1945) the local currency was mostly replaced by Japanese military notes. A certain amount of unbacked notes, signed by executives of the Hongkong and Shanghai Banking Corporation under duress, also went into circulation. These duress notes were validated in 1946 by the bank, which paid the required sterling backing to the Exchange Fund over a number of years.

Since all available local coins had been confiscated and sent to Japan for melting down, the restored colonial government in the late 1940s issued paper money in large quantities until a coinage could be re-established.

Currency notes in Hong Kong are issued by three note-issuing banks: The Hongkong and Shanghai Banking Corporation Ltd, the Standard Chartered Bank (Hong Kong) Limited and the Bank of China (Hong Kong) Limited. In 2002 the Government issued a new ten dollar note to meet the public demand for a ten dollar note in addition to the ten dollar coin. All Hong Kong currency notes issued are fully backed by US dollar reserves held in the Exchange Fund.

Major note-issuing banks in Hong Kong

Year of establishment in Hong Kong Bank Note issues
1845 The Oriental Bank Corporation The first note-issuing bank in Hong Kong. Collapsed in 1884.
1857 The Chartered Mercantile Bank of India, London and China Started issuing notes in 1859, stopped in 1892 and resumed in 1912 until 1974. Sold to the Hongkong and Shanghai Banking Corporation in 1959, then to Citibank in 1984 and then to the Bank of Tokyo-Mitsubishi in 1987.
1859 Chartered Bank of India, Australia and China, renamed as Standard Chartered Bank From 1862 to the present.
1862 Agra and United Service Bank Ltd later renamed Agra and Masterman's Bank Ltd Started issuing notes in 1863. Collapsed in 1866.
1863 Commercial Bank Corporation of India and the East Started issuing notes in 1866. Collapsed in the same year.
1865 Hongkong and Shanghai Banking Co. Ltd. renamed The Hongkong and Shanghai Banking Corporation in 1866. From 1865 to the present.
1891 National Bank of China Limited Started issuing notes in 1891. Collapsed in 1911.
1917 Bank of China Started issuing notes in 1994.