HUA Nan Commercial Bank, the first Taiwanese bank to have a branch in the territory, is worried about its future access to Hongkong dollar funding.
Andrew Wu, who heads its representative office, said: ''It is a major limitation not to be able to place funds with and borrow from mainland Chinese banks.'' Taiwanese banks are allowed to have business transactions with Chinese banks in a third territory.
But interbank activities such as placing deposits and borrowing are still prohibited.
He added: ''The Chinese banks are occupying an increasing proportion of the Hongkong dollar market. This will further accelerate when Bank of China starts to issue bank notes next year.'' Tipped to become major Hongkong dollar suppliers, the Bank of China and other Chinese banks in the group will inevitably be interbank partners.
Foreign banks operating a single branch in Hongkong generally have a limited Hongkong dollar deposit base and must resort to the interbank market for funding.
''We will see how it goes first. The regulation will be subject to review later and may be revised according to practical needs,'' Mr Wu said.
