A tram drives past the HSBC headquarters in Hong Kong, May 4, 2018. (KIN CHEUNG / AP PHOTO)
Hong Kong and Shanghai Banking Corporation is to cancel the minimum-balance and below-balance fees for most of its bank accounts from Aug 1, benefiting more than 3 million retail customers in Hong Kong.
HSBC's cancellation of the minimum-balance and below-balance fees is also seen as a preparatory measure against fierce competition from virtual banks, since virtual banks have no minimum balance requirements
The banking giant said on Wednesday it’ll provide free basic banking services for clients with personal and advance integrated accounts, Hong Kong dollar statement savings and passbook savings accounts, as well as cash-card accounts.
No service fee or annual fee will be charged for those holding SuperEase accounts and university student accounts. The lender will also drop associated charges for small depositors, such as counter transaction fees.
“More than three 3 million retail banking customers will benefit from the removal of our below-balance fees, counter transaction fees and monthly or annual fees for most of our personal savings accounts,” said Greg Hingston, head of retail banking and wealth management at HSBC Hong Kong.
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He sees the move as a key step in reinforcing HSBC’s commitment to promoting financial inclusion and making banking easy for customers from all backgrounds.
It’s also seen as a preparatory measure against fierce competition from virtual banks, which are expected to begin services in September, since virtual banks have no minimum balance requirements.
The Hong Kong Monetary Authority has issued eight licenses since March for virtual banks, which operate entirely online without a brick-and-mortar network.
Other major lenders in the SAR are expected to follow in HSBC’s footstep. Traditionally, banks set minimum-balance levels for various accounts. If accounts fall below the minimum balance required, fees may be charged directly on the accounts.
In the case of Bank of China (Hong Kong)’s iFree banking and enrich banking accounts, the thresholds are set at HK$10,000 and HK$200,000, respectively. The lender’s personal integrated account charges HK$60 if the average three-month deposit and trading volume falls below HK$5,000.
The minimum requirement for a DBS account is a deposit of HK$200,000.
READ MORE: HK grants virtual bank licenses in test to traditional lenders
DBS Hong Kong declined to confirm with China Daily if it will follow HSBC’s adjustment. The Singapore-based lender said it’ll revisit the product proposition and its threshold from time to time to meet customers’ needs.
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