Consultation on enhancements to Deposit Protection Scheme launched

Press Releases

12 Sep 2014

Consultation on enhancements to Deposit Protection Scheme launched

The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) jointly issued today (September 12) a consultation paper on the proposed enhancements to the Deposit Protection Scheme (DPS).   

The DPS is a statutory scheme established to protect depositors and reduce the risks of bank runs during a banking crisis. It is operated by the Hong Kong Deposit Protection Board (the Board). 

The DPS is a key component of the financial safety net that contributes to the general stability of the financial system in Hong Kong.  

While the DPS has never been triggered since its establishment in 2006, its role in contributing to depositor confidence and general banking stability has been affirmed. It is important that enhancements to the DPS are implemented to provide a more reliable safeguard for depositors against any event of bank failures.  

We note that a key focus of relevant reforms internationally in recent years is to strengthen the capacity to make prompt payouts when a deposit protection scheme is triggered. 

In view of this and the recent assessment results of the International Monetary Fund, the Government proposes introducing the following enhancement measures to the DPS to accelerate the process of making deposit compensation to depositors when a bank fails: 

  • Adopting the "gross payout" approach to determine DPS compensation, i.e. a depositor will be compensated an amount up to the DPS protection limit, currently $500,000, without the need to set-off the depositor’s liabilities against his/her protected deposits in the same bank at the time of determining and distributing the payouts; 
  • Providing more certainty for determining the reference date used for calculating the deposit compensation amount to accelerate the calculation; and 
  • Enabling the use of electronic communication channels by the Board under certain circumstances, in addition to the conventional written communication, to notify depositors of the compensation arrangements and other details in case the DPS is triggered. 

A government spokesperson said, "The proposed enhancements to the DPS will strengthen the financial safety net for general depositors, and further consolidate Hong Kong’s status as an international financial centre." 

The Government will study carefully all comments received during the public consultation which will last three months until December 12, 2014, and will take them into account in preparing the necessary legislative amendments. 

The consultation paper can be downloaded from the website of the FSTB ( or the HKMA ( 


Consultation Paper (PDF format)

Frequently Asked Questions (PDF format)



Financial Services and the Treasury Bureau
Hong Kong Monetary Authority
12 September 2014

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Last revision date : 12 September 2014