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The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA) welcomes the announcement by the Hong Kong Association of Banks (HKAB) today (June 10) that the industry is going to implement the second batch of 11 credit card reform measures which will further improve consumer protection and transparency of credit card business. The second batch follows the first batch announced in January 2011 and is among a series of measures under discussion to enhance credit card practices, having regard to credit card reforms in the UK and US.
The second batch of 11 measures cover practices in relation to interest rates, repayment, increase in credit limit, disclosure, billing practices, and student cards. They aim at promoting fair and responsible business practices by credit card issuers. Customers will benefit from measures that help minimise interest payments (e.g. no "double-cycle billing" and allocation of payments first to highest-interest-rate-debt and then to other balances in descending order of interest rates). The increased disclosure will also empower customers to compare products/services among banks and make more informed decisions.
Four of the measures are expected to be in place by the third quarter of this year, while the other seven, which require significant system changes on the part of card issuers, will be implemented within next year.
Deputy Chief Executive of the HKMA, Mr Arthur Yuen, said "The HKMA is pleased to see this initiative by the banking industry to improve the fairness and transparency of credit card operations. This shows the industry is taking a step in the right direction in strengthening its corporate culture to take the interests of consumers into consideration in its business dealings."
The HKMA will continue to follow up with the industry in the implementation of the remaining measures as soon as practicable.
Ends/Friday, June 10, 2011
Issued at HKT 19:32
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