4. What are the differences between banks and licensed money lenders in terms of money lending and borrowing?

4. What are the differences between banks and licensed money lenders in terms of money lending and borrowing?

1. Banks and deposit-taking companies under the Banking Ordinance (Cap. 155) (collectively, “Authorized Institutions”) are supervised by the Hong Kong Monetary Authority. 
2. The Money Lenders Ordinance (Cap. 163) expressly provides that it does not apply to Authorized Institutions. An Authorized Institution is not required to obtain the money lender’s licence nor comply with the other requirements under the Money Lenders Ordinance (Cap. 163). In conducting its lending business, an Authorized Institution is not regulated by the Registrar of Money Lenders. This is because Authorized Institutions are subject to significantly stricter requirements than licensed money lenders under the Money Lenders Ordinance (Cap. 163), and there is no point in duplicating supervisory efforts.
3. The lending business of an Authorized Institution forms part of its banking or deposit-taking business. In conducting its lending business, an Authorized Institution is required to comply with the applicable regulatory requirements under the Banking Ordinance (Cap. 155) and its subsidiary legislations, as well as any applicable supervisory policy manuals, codes of practice, guidelines and circulars issued or endorsed by the Hong Kong Monetary Authority. 
4. For example, although the interest rates restrictions imposed by the Money Lenders Ordinance (Cap. 163) do not apply to Authorized Institutions, all Authorized Institutions are required to treat customers fairly and should not charge extortionate or unreasonable interest rates.