LCQ21: Realisation of concept of financial inclusion

Hong Kong (HKSAR) -      Following is a question by the Hon Wu Chi-wai and a written reply by the Secretary for Financial Services and the Treasury, Mr James Lau, in the Legislative Council today (February 28):


     At present, there are only five vehicle-converted bank mobile branches in the territory, which station, by rotation, in districts where the coverage of banking services is insufficient. Many people therefore still need to travel a long distance to visit bank branches in other districts in order to use banking services, which is particularly inconvenient to the elderly. The Hong Kong Association of Banks (HKAB) announced in November last year that starting from March this year, it would, in collaboration with EPS Company (Hong Kong) Limited and a chain convenience store, provide for the elderly EPS cash withdrawal service without the requirement to make purchases (cash withdrawal service for the elderly) at 34 convenience stores located in relatively remote areas, such as the outlying islands and Tin Shui Wai.

On the other hand, the Government indicated in 2006 that as the service scope of the Hongkong Post (HKP) was bound by the Post Office Ordinance (Cap 98) and the Trading Funds Ordinance (Cap 430), HKP could not provide withdrawal and deposit services on behalf of banks. However, HKP announced early this month that it would provide cash withdrawal service for the elderly in phases in seven selected post offices starting from April this year. Regarding realisation of the concept of financial inclusion, will the Government inform this Council:

(1) whether it knows the specific implementation date for the cash withdrawal service for the elderly to be provided at convenience stores, the service restrictions and other details; whether HKAB is currently discussing with other chain convenience stores, supermarkets or shops the provision of such service; if discussion is underway, of the details and progress;

(2) whether it knows if the various banks have plans in the coming three years to (i) launch more mobile branches and (ii) introduce other measures for realising the concept of financial inclusion; if they do, of the details;

(3) of the details of the cash withdrawal service for the elderly to be provided by HKP, including (i) the specific implementation date, (ii) the names of the seven post offices, (iii) the set-up costs, and (iv) the estimated annual recurrent expenditure; as it has been reported that the banks participating in the initiative of providing cash withdrawal service for the elderly at convenience stores need to pay a transaction cost of about $6 per transaction, of the fee that HKP will charge the banks for each transaction of the cash withdrawal service for the elderly;

(4) of the criteria adopted by HKP for selecting the seven post offices, and whether HKP has plans to extend the cash withdrawal service for the elderly to other post offices; if so, of the details;

(5) of the restrictions imposed by the two aforesaid ordinances in respect of HKP's provision of withdrawal and deposit services on behalf of banks; whether the Government will study the provision of other banking services in post offices; and

(6) whether the Government will study setting aside some areas in other government venues (such as the cultural and recreational facilities under the Leisure and Cultural Services Department) for banks to install automatic teller machines or provide other services, in order to further realise the concept of financial inclusion?



     Having consulted the relevant policy bureaux, our consolidated reply to the question raised by Hon Wu is as follows:

(1) and (2) To promote financial inclusion, the Hong Kong Monetary Authority (HKMA) has been actively following up and coordinating with retail banks to further enhance the coverage of banking networks in remote areas and public housing estates (PHEs).

Positive responses were received from banks, which have undertaken to set up some ten branches and three mobile branches gradually starting from 2017. As at the end of this January, seven branches have already started operations in Tin Shui Wai North, Sha Tin and Kwai Chung, while three mobile branches have commenced services in PHEs, adding up to a total of five mobile branches for serving 24 locations in Hong Kong.

     The HKMA encourages banks to apply new technologies and operation modes, such as video teller machines (VTMs), to supplement the existing banking networks apart from providing physical branches. Currently, there are more than 200 VTMs in Hong Kong, which allow bank staff at customer service centres to provide interactive banking services and engage in real-time conversations with customers through video imaging.

The HKMA will continue to monitor the operation of mobile branches and VTMs, and explore with banks the feasibility of further enhancing the relevant services.

     The HKMA has also been encouraging the banking industry to enhance banking services for senior citizens and residents living in remote areas through various means. In response to our earlier request for the Hong Kong Association of Banks (HKAB) to consider the proposal of allowing elders to withdraw cash at convenience stores without the need to make purchases, the banking industry, the EPS Company (Hong Kong) Limited (EPS Company) and a convenience store chain decided in November 2017 to roll out the arrangement. A pilot will be launched in early March this year allowing senior citizens to withdraw cash via EPS service at 34 convenience stores in the more remote areas, such as Cheung Chau, Lantau Island, Yuen Long, Tin Shui Wai and Sheung Shui, without making purchases.

The arrangement will cover all the 20 member banks of the EPS Company. Except for the daily rush hours from 7.30am to 10am, holders of senior citizen cards can withdraw cash using banking cards with EPS function at selected convenience stores without making purchases, subject to a cap of $500 each transaction and a maximum of two transactions per day. The HKAB and EPS Company will review the effectiveness of the pilot scheme before considering extension of the service to more areas.

The target is to expand the service to most of the outlets of the convenience store chain in question by the end of this year. The HKMA will continue to follow up with HKAB, and encourage HKAB to recruit more merchants to join the programme so as to provide more convenient cash withdrawal services for the elderly.

(3) to (5) In response to calls for financial inclusion, Hongkong Post (HKP) will introduce a cash withdrawal service without making purchases for senior citizens to complement the existing networks for senior citizens to withdraw cash. HKP currently plans to introduce the service progressively in April this year in seven Post Offices mainly in the New Territories and on outlying islands, for senior citizens to withdraw cash up to $500 per transaction.

The selection of these Post Offices is mainly based on operational considerations of HKP (e.g ., manpower and equipment, cash and counter management, etc.). HKP is now discussing with EPS Company the operational details and commercial terms of this agency service, and will announce the service details in due course. Whether HKP will provide the same service in more Post Offices will depend on the actual need and other relevant factors.

For the time being, HKP has no intention to introduce other banking services.

(6) Currently, automatic teller machines (ATMs) are installed at government premises, such as the Immigration Tower in Wan Chai and the Tai Po Government Offices, through tendering procedures. Relevant departments will review from time to time the availability of locations for banks to set up ATMs. Where suitable sites are available, we will further explore with the banking industry the feasibility of setting up ATMs.

Published on: 2018-02-28

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