Press Release
LCQ13: Remittance business
Wednesday, January 19, 2000
Following is a question by the Hon Emily Lau and a written reply by the Acting Secretary for Financial Services, Mrs Rebecca Lai, in the Legislative Council today (Wednesday):
Question:
Will the Executive Authorities inform this Council if they know:
(a) the current procedure adopted by licensed banks for handling remittance by telegraphic transfer from overseas to their local customers' accounts and the time required for completing such procedure;
(b) whether the Hong Kong Monetary Authority ("HKMA") has issued guidelines to licensed banks on the handling of various matters in connection with remittance by telegraphic transfer (such as the date for crediting the remitted amount to the recipient's account and the point of time at which the interest on the remittance payable to the recipient starts to accrue, etc); if it has not, whether the HKMA will consider formulating such guidelines; and
(c) whether the HKMA has clearly defined the terms commonly used in the banking industry (such as the date for crediting the amount in a remittance transaction), so that the industry has the ground rules to follow?
Reply:
Madam President,
(a) Banks in Hong Kong follow international practices in handling inward remittances by telegraphic transfer to their local customers. The internationally adopted network of telegraphic communication between banks is provided by the Society for Worldwide Interbank Financial Telecommunications (SWIFT). Through the network, a remitting bank conveys funds transfer instruction to a payee bank, instructing it to effect payment to the beneficiary of the transfer.
After an overseas remitting bank has issued fund transfer instruction to a Hong Kong payee bank, the remitting bank will arrange payment of the remitted funds either direct to the payee bank, or via the correspondent bank of the payee bank. After confirming receipt of funds and checking for restraints that prohibit crediting of the beneficiary's account (for example, court restraint orders), the payee bank will effect payment to the beneficiary in accordance with the funds transfer instruction.
In general, a bank processes a funds transfer instruction and the related remitted funds on the same day that they are received, provided that they are received prior to th