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Following is a question by the Hon Albert Chan and a reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (November 9):
Question:
I note that in recent years some note-issuing banks (NIBs) have closed their local branches in a number of public housing estates (PHEs). For instance, the Hongkong and Shanghai Banking Corporation Limited (HSBC) has closed its local branches in Lei Muk Shue Estate, Shek Wai Kok Estate, On Ting Estate, Yau Oi Estate and Tai O, and reduced the service hours of its local branch in Mui Wo. On the other hand, residents of some newly completed PHEs, such as those in Tin Shui Wai and Tung Chung, have repeatedly requested the HSBC to set up branches or teller machines in their estates, but such requests have been refused. As the reduction in the number of local branches by NIBs has caused great inconvenience to many people, especially recipients of Comprehensive Social Security Assistance, will the Government inform this Council:
(a) of the number of branches set up by each NIB in Hong Kong in each of the past five years, and whether these banks have an obligation to provide basic services for the public;
(b) whether it will consider revoking the NIB status of banks if they keep scaling down the services of their local branches; if so, of the details; if not, the reasons for that; and
(c) whether it will consider granting the NIB status to banks whose services can serve the needs and interests of the general public better than NIBs; if so, of the details; if not, the reasons for that?
Reply:
Madam President,
Based on the statistics of the Hong Kong Monetary Authority, the total number of branches maintained by the three note-issuing banks (NIBs) has decreased from 580 in January 2001 to 422 at present. This is mainly because the number of banking transactions carried out by customers through bank branches has decreased given the growing popularity of electronic banking services. In response to this development, banks have adjusted their branch networks.
The responsibility of the NIBs is to maintain an effective network for the distribution of banknotes so that banknotes issued by them can be distributed through the banking system in a speedy manner to meet the public's demand. As regards the provision of banking services, the NIBs are no different from other banks, in that such decisions are made on the basis of commercial considerations.
According to the Legal Tender Notes Issue Ordinance (Cap. 65) and the terms and conditions specified by the Financial Secretary, the main functions of the NIBs are to maintain the stability of Hong Kong's notes issuance operation and to ensure the stable supply of banknotes. The NIBs are responsible for the safekeeping and the handling of the withdrawal and the storage of banknotes so as to meet the demand of the public. The offer of branch services and the increase or decrease in the number of branches, on the other hand, are the commercial decisions of banks.
Currently, the three NIBs in Hong Kong are able to provide adequate and stable supply of banknotes through their distribution networks. We do not think that it is necessary to increase the number of NIBs.
Like other private sector organizations, banks operate according to commercial principles. At the same time, we believe that they will assume corporate social responsibilities and have due regard to the needs of the public. We encourage banks to fulfil their social responsibilities, but it is for individual organizations to decide on the specific means.
Thank you, Madam President.
Ends/Wednesday, November 9, 2005
Issued at HKT 12:06
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