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HKMA sets deadline for 1st batch of online bank license applications

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HKMA sets deadline for 1st batch of online bank license applications

The Hong Kong Monetary Authority, or HKMA, is now open to accepting applications for online-only banking licenses, and has set Aug. 31 as the deadline for submission of the first batch of applications, the South China Morning Post reported May 30.

More than 50 companies have expressed interest in applying to operate as a purely online bank in the city, the report said, citing HKMA Deputy CEO Arthur Yuen.

Yuen, who expects the HKMA to issue the first batch of licenses by the end of 2018 or in the first quarter of 2019, said applicants will be scrutinized for their IT platform, viability of business plan and financial background.

The HKMA issued final guidelines for the application of virtual banking licenses May 30. The final guidelines are not very different from the proposed guidelines set forth in the February public consultation.

Virtual banks need to have at least HK$300 million in capital to apply. They cannot impose a minimum account balance or low balance fees, and cannot charge excessively high interest rates or engage in aggressive strategies to compete for market share.

The HKMA announced plans to introduce virtual banks in Hong Kong in September 2017.