Custody by Authorised Institutions of Customers' Passports

Guideline No. : 3.5
Our Ref. CB/POL/2/9 29 June 1995
Mr. Ian Wilson
Chairman
The Hong Kong Association of Banks
Room 525, Prince's Building
10 Chater Road
Hong Kong
Dear Mr. Wilson,
Custody by Authorised Institutions of Customers' Passports I am writing to set out the Monetary Authority's views on the practice whereby some authorised institutions take customers' passports for custody when making loans to them. As you will be aware, while money lenders are prohibited by the Money Lenders Ordinance from engaging in this practice, there is no similar prohibition in the Banking Ordinance applying to authorised institutions. The Monetary Authority is of the view, however, that if authorised institutions do engage in this practice, they should observe the following guidelines:

1. Customers should be issued with a formal receipt acknowledging custody
   of their passport.
2. Passports should be handled and stored under secure conditions.
3. Passports should be released to the customer on production of evidence that
   they are needed for genuine purposes, even when the institution is still owed money by the customer. The Monetary Authority will monitor adherence to these guidelines during the course of on-site examinations of institutions and discussions with their management. I would be grateful if you would circulate this letter for the information of your members. I am writing in similar terms to the Chairman of the Deposit-taking Companies Association.

Yours sincerely,
D T R Carse
Deputy Chief Executive