The Hong Kong Monetary Authority is proposing revised guidelines for setting up virtual banks in the city, allowing financial institutions and technology companies to apply for and own such banks.
The new rules call for virtual banks to operate as a locally incorporated bank, according to draft guidelines issued Feb. 6. Virtual banks will be subject to the same set of supervisory principles and key requirements applicable to conventional banks, and will be required to provide an exit plan should they need to unwind themselves in the future.
Banks, financial institutions and technology companies may apply for a license and own virtual banks, but are not allowed to impose any minimum account balance requirement or low-balance fees on customers of the virtual bank.
Further, the regulator will require such banks to have at least one customer service center to handle customer concerns.
The regulator is looking for public comments on the proposed guidelines until March 15, with the final guidelines expected to be issued in May. It noted that companies looking to apply for virtual banking licenses may still submit their applications to the regulator.
