The Monetary Authority today published a revised Guideline on Authorization of Virtual Banks.

During the public consultation, the authority received submissions from 25 respondents, including the Hong Kong Association of Banks, the DTC Association, the Consumer Council, chambers of commerce, an industry association from the fintech community, technology companies and professional firms.

All respondents supported the introduction of virtual banking in Hong Kong.

Most agreed virtual banks should be subject to the same supervisory requirements applicable to conventional banks.

No respondents objected to allowing both financial and non-financial firms to operate a virtual bank in Hong Kong.

There was broad support for virtual banks to operate in the form of a locally-incorporated entity with no physical branches.

On the minimum paid-up capital requirement of $300 million for virtual bank applicants, the authority said the requirement is stipulated in the Banking Ordinance and is applicable to all licensed banks, adding it is inappropriate to lower the requirement for virtual bank licensees.

The authority has received enquiries and indications of interest from over 50 companies since the announcement last September of its intention to encourage virtual banking in Hong Kong.

It said the companies should submit a substantially complete application to the authority by August 31 or they will unlikely be included in the first batch of virtual bank applications to be processed.

Click here for the guideline.