Thursday, March 10, 2011

Handout heading to bank accounts

(The Standard, March 09, 2011)

People are likely to get the HK$6,000 budget handout put into their bank accounts, sources said.

The Hong Kong Monetary Authority met with local banks over the possibility of handing out the cash through bank accounts and last week asked banks to submit statistics of individual account holders.

An HSBC banker said yesterday that giving out the cash in that way is feasible.

In an abrupt about-turn, Financial Secretary John Tsang Chun-wah last week scrapped the plan to inject HK$6,000 into the MPF accounts of all workers and announced giving the same amount to all adult permanent residents.

He also said a scheme is being planned to encourage citizens not to withdraw the money immediately. One idea is to provide interest incentives to those who do not use the money at once.
Tsang yesterday remained tight- lipped over how the money will be handed out.

Sources have said that the authorities are unwilling to send checks through the post as letters can get lost.

Mark McCombe, chief executive of HSBC in Hong Kong, said using the banking system is one feasible option.

"I think operationally it will not be a problem because Hong Kong already has a very effective payment system and a very effective interbank system," he said.

"People in Hong Kong have bank accounts."

It is understood that more discussions will be held between banks, other stakeholders and the authorities over technical details, including how to cover those who do not have an account.

Another issue is those who have had their account frozen may have to retrieve the money directly from the government.

Those with more than one account reportedly may be able to choose into which one they wish the money to be deposited.

McCombe also said more discussions are needed with the monetary authority and the government for the option to be finalized.

"But it's down to the government and the HKMA to lead the way on this. It's not our initiative. It's an initiative of the government," he said.

Authority officials are expected to meet again with banks in the next few weeks to finalize the details.

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