As scheduled, the final phase of interest rate deregulation covering Hong Kong dollar savings and current accounts takes effect today (3 July 2001). From now onwards, interest rates on all types of deposits, including savings account deposits, will be determined by competitive market forces. The prohibition of interest on current accounts is also lifted at the same time.
"Deregulation will allow banks to compete for deposits freely on the basis of price and product innovation. This will enhance the efficiency and the competitiveness of our banking sector," said Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA).
The HKMA notes that different banks have been responding to deregulation in different ways with regard to their charging policy for account services, minimum balance requirements and tiering of interest rates. Customers therefore have a choice as to how they access banking services and at what cost. However, as a greater diversity of banking products and services is available in the market, consumers should be prepared to shop around to look for the services that suit them best.
Mr Carse added that the HKMA would be monitoring the impact of deregulation closely.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
3 July 2001
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