Regulatory Alerts2022-10-27
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Annex A: Impact of Revision to Interest Rate Limits under the Money Lenders Ordinance on the Banking Industry
The document outlines the revised statutory interest rate limits under the Money Lenders Ordinance effective from 30 December 2022, lowering the legal limit from exceeding 60% to exceeding 48%. It simultaneously reduces the Annualised Percentage Rate threshold presumed to be extortionate under section 12.3 of the Code of Banking Practice from exceeding 48% to exceeding 36%. Authorized Institutions must justify why such high interest rates are not unreasonable or unfair, unless exceptional monetary conditions apply.
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