Hong Kong mulls raising deposit protection limit to HK$800,000

The number of depositors fully protected will rise to 92%.

Hong Kong is floating plans to raise its bank deposit protection limit to HK$800,000 from HK$500,000 previously.

The Hong Kong Deposit Protection Board has issued a consultation paper on enhancements to the Deposit Protection Scheme (DPS), according to an announcement posted at the Hong Kong Monetary Authority (HKMA) website.

Amongst proposals include raising the deposit protection limit by 21%, which the HKMA said is in line with the inflation.

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Should the protection limit rise push through, it will raise the portion of Hong Kong depositors fully protected from the current 89% to 92%.

Other enhancements suggested include the levy system: switching back to the build-up levy to cater for a higher protection limit, with the build-up levy rates kept unchanged; and a discussion on deposit protection arrangements in the event of a bank merger, where affected depositors will be provided enhanced coverage for six months upon a bank merger.

The board also plans to require the display of the DPS membership sign on the digital channel of Scheme members, and streamlining negative disclosure requirements on non-protected deposits for private banking customers. 

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The consultation is open beginning 13 July and will last 3 months. Members of the public and interested parties are invited to submit their views and comments on or before 12 October 2023 by mail, email, or by fax through the following channels:

• Mail: The Board’s office at Room 1802-1810, 18/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong (Please indicate: DPS Enhancements)
• Email: dps_enhancements@dps.org.hk
• Fax: (852) 2290-5168