LCQ16: Designs of Banknotes (25

Press Release

LCQ16: Designs of banknotes

February 25, 2004

Following is a question by the Hon Lau Kong-wah and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council .

Question:

At present, the three note-issuing banks separately design and issue their respective banknotes of various denominations, resulting in banknotes of the same denomination bearing different designs, which may cause confusion to tourists. In this connection, will the Government inform this Council:

(a) of the number of complaints about the lack of uniformity in banknote designs received by the authorities concerned in each of the past five years;

(b) whether it is aware of other economies in which the competent authorities concurrently issue banknotes of the same denomination with different designs; and

Reply:

Madam President,

(1) In the past five years, the Hong Kong Monetary Authority ("HKMA") has not received any complaints from the public or tourists regarding the non-standardised designs of banknotes in Hong Kong. During the period, HKMA received some suggestions concerning the standardisation of banknote designs from three members of the public.

(2) To the best of the HKMA's knowledge, Macau, Northern Ireland and Scotland each have two to three note-issuing banks in their respective jurisdiction. The designs of the banknotes of the same denomination in each of these jurisdictions are also non-standardised.

(3) Traditionally, the banknotes in Hong Kong have been issued by commercial banks (Standard Chartered Bank and The Hongkong and Shanghai Banking Corporation Limited began to issue banknotes in 1862 and 1865 respectively, while the Bank of China (Hong Kong) Limited began to issue banknotes in 1994). The three note-issuing banks are also responsible for the designs of banknotes and related distribution arrangements. To facilitate recognition of banknotes by the public, the HKMA has standardised the security features and colour schemes of the new series banknotes issued since 2003.

The three note-issuing banks have acquired extensive experience in note-issuing and their actual note-issuing operations are considered satisfactory. The designs of the banknotes are also found to be acceptable by the general public. The HKMA has no intention to change the current arrangements as they are operating effectively.