Custody by authorized institutions of customers' passports

Guideline No. 3.5

Custody by Authorised Institutions of Customers' Passports

I am writing to set out the Monetary Authority's views on the practice whereby some authorised institutions take customers' passports for custody when making loans to them.

As you will be aware, while money lenders are prohibited by the Money Lenders Ordinance from engaging in this practice, there is no similar prohibition in the Banking Ordinance applying to authorised institutions. The Monetary Authority is of the view, however, that if authorised institutions do engage in this practice, they should observe the following guidelines:

  1. Customers should be issued with a formal receipt acknowledging custody of their passport.
  2. Passports should be handled and stored under secure conditions.
  3. Passports should be released to the customer on production of evidence that they are needed for genuine purposes, even when the institution is still owed money by the customer.

The Monetary Authority will monitor adherence to these guidelines during the course of on-site examinations of institutions and discussions with their management.

I would be grateful if you would circulate this letter for the information of your members. I am writing in similar terms to the Chairman of the Deposit-taking Companies Association.

Last revision date : 01 August 2011