The Hong Kong Deposit Protection Board has proposed several enhancements to the Deposit Protection Scheme, including raising the protection limit from the current $500,000 to $800,000.

The board today issued a consultation paper on the enhancements and launched a three-month consultation that will run until October 12.

Board chairman Connie Lau Yin-hing said in a press conference that a comprehensive review of the scheme, initiated in 2021, confirmed that it is substantially in compliance with international standards.

The board states in its consultation paper that raising the protection limit to $800,000 would mean that about 92% of depositors are protected, up from the current 89%. It adds that the change would allow the scheme to keep up with inflation and continue to meet international standards.

The board also suggests providing enhanced coverage to affected depositors for six months in the event of a bank merger.

Another proposed enhancement is to require banks to display the scheme membership sign on their digital channels and to streamline negative disclosure requirements on non-protected deposits for private banking customers. 

The board’s Chief Executive Officer Daryl Ho said it had taken into account a host of factors and sought to strike a reasonable balance between enhancing protection for depositors and keeping additional costs at a manageable level.

He said the board welcomes views and comments from relevant stakeholders and will take these into account in finalising its proposals.