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The Hong Kong Monetary Authority (HKMA) has issued a circular today (July 22) reminding banks of the requirement to put in place effective customer complaint procedures. It has also published a leaflet to advise consumers of the procedures they should follow if they have complaints about banking services.

In February, the HKMA issued a guideline to require banks to put in place effective internal procedures for handling customer complaints. The guideline came into full effect on June 30 2002. Among others, the guideline requires banks to have systems to ensure that customer complaints are fully and promptly investigated and resolved in a satisfactory manner. Banks should also make available details of their internal complaint handling procedures, and should be able to advise customers of the contact details of the person for handling customer complaints within the institution.

The leaflet advises customers who have a complaint about banking services to first try to resolve their dispute with the bank. This would give the bank concerned the chance to put things right at an early stage. "Our experience suggests that most complaints can be resolved in this manner," said Mr David Carse, Deputy Chief Executive of the HKMA. "If the matter remains unresolved after the bank has dealt with the complaint or the bank fails to give a final response within a reasonable period, the complainant can then seek assistance from the HKMA. The HKMA will try to help as far as it can subject to the limitations on its role in dealing with customer complaints."

The leaflet also explains in plain terms the HKMA's role in handling complaints about banking services, which is mainly to ensure that banks' complaint handling procedures are working properly and that customer complaints are handled in a thorough and prompt manner. The HKMA will follow up with the bank concerned in case the complaint reveals any breach of the Code of Banking Practice or of other relevant codes, guidelines or regulations. But the HKMA does not have the power to arbitrate in customer disputes or to order banks to pay any compensation. "We hope this will increase consumers' understanding of the HKMA's role," said Mr Carse.

The leaflet is available at the HKMA Resource Centre and on the HKMA's website at www.hkma.gov.hk.

For further enquiries, please contact:

Thomas Chan, Senior Manager (Press), at 2878 1480 or

Sylvia Yip, Manager (Press), at 2878 1687

End/Monday, July 22, 2002

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