Moves to Loosen Restrictions on Banking Services to SMEs in Hong Kong are “A Welcome Step”
09 Sep, 2016
The message from the Hong Kong Monetary Authority that banks must do more to cater to foreign start-ups and small and medium-sized businesses has been welcomed by the head of Ogier’s Corporate Practice in Hong Kong, Nathan Powell.
Yesterday, the HKMA intervened to warn local banks that due diligence requirements – which have been significantly tightened in recent years – have been applied too stringently and in a way that is disproportionate to the likely risk levels of foreign small and start-up customers.
The HKMA statement underlined the importance of anti-money laundering and counter-terrorism controls, but said that a risk-based approach should be adopted by banks to stop small firms from being effectively excluded from banking services.
Nathan said: “We welcome this statement by the HKMA, which brings us to a more level playing field and a more business-friendly environment.
“The international regulatory environment has put more pressure than ever on banks in terms of compliance and due diligence, but this shift to a risk-based approach is a pragmatic and forward-thinking one.
“We look forward to the HKMA publishing its list of banks willing to offer services to foreign small and medium-sized enterprises and start-ups, an initiative which will help to resolve some of the recent issues.”