Withdrawing and depositing money in post offices is not a feasible option as it may strain resources and encounter legal problems, Secretary for Economic Development & Labour Stephen Ip says.

In a written reply at LegCo today, Mr Ip said the Hong Kong Association of Banks has set up a task force to identify ways to address the inconvenience to some bank customers caused by reduced branches.

At the task force's request, Hongkong Post earlier offered information on the feasibility of banks delivering withdrawal and deposit services in post offices.

The findings show the proposed arrangement would require extra floor space, facilities, and IT systems if the banks were to provide services in post offices, while most post offices' resources are already stretched.

"Therefore, there would be considerable impact on the quality of postal services," Mr Ip said.

Ordinances prevent post offices from offering bank services

He added Hongkong Post is bound by the Post Office Ordinance and the Trading Fund Ordinance, so it cannot provide withdrawal and deposit services on behalf of banks.

To provide banking services would likely involve issues such as capital arrangement and risk management, making the chance of Hongkong Post providing such services even more remote.

Mr IP said the current distribution channel of welfare benefits through 40 banks remains sound, sp there is no plan to distribute Comprehensive Social Security Assistance and Social Security Allowance payments through post offices at this stage.

For physically disabled recipients who have difficulties collecting payments, the Social Welfare Department will arrange a special monthly cash delivery.