DBS Bank (Hong Kong): Incident Concerning Safe Deposit Boxes

The Hong Kong Monetary Authority (HKMA) today announced that it has required DBS Bank (Hong Kong) Ltd to carry out a thorough investigation into the recent destruction of rented safe deposit boxes at its Mei Foo branch. This investigation is to cover both the incident itself and any implications that the case may have for the operations and controls of the bank's safe deposit boxes generally and include any remedial actions that may be necessary in the light of the lessons learned. The HKMA will take into account the outcome of this investigation in determining what, if any, further supervisory action may be warranted.

The HKMA also notes that the bank has today announced its plans for compensating customers who have suffered losses as a result of the destruction of the safe deposit boxes, including a one-off ex gratia payment to be made to all affected customers in addition to the full settlement of claims. The HKMA expects the bank to carry out its plans for arranging full and final settlement of claims as expeditiously as possible. "Satisfaction of legitimate customer claims for damage and reimbursement for losses must be a first priority for the bank," an HKMA spokesperson said.

"The HKMA takes a very serious view of this incident and wishes to stress that banks in Hong Kong must have in place a sound and effective system for safeguarding the interests of their customers and managing the risks arising from their business operations," the HKMA spokesperson said. "The HKMA therefore supports and welcomes the plans by the Hong Kong Association of Banks to discuss the question of how industry standards relating to safe deposit box operations of banks might be improved," the spokesperson added. The HKMA will work with the industry to make sure that Hong Kong banks observe best practices in this area.

For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
6 October 2004