5-Day Clearing Week
The Hong Kong Association of Banks has announced that the banking industry will adopt a 5-day clearing week with effect from 4 September 2006.
A 5-day clearing week means that clearing and settlement of funds through methods such as cheque autopay or electronic fund transfer will take place from Mondays to Fridays only. After the 5-day clearing week is implemented, bank customers will not be able to drawdown or repay bank loans on Saturdays in cases where relevant transactions involve interbank fund transfers on the same day. If a cheque is paid into the bank on a Saturday, it might be treated as if the cheque were paid on the next clearing day.
In view of the above changes and the fact that individual banks may have their own arrangements regarding their services on Saturdays after the implementation of the 5-day clearing week, practitioners should advise their vendor or purchaser clients to avoid selecting Saturday as the due date for payment of the deposit or any part of the purchase price.
Practitioners are reminded to take note of the above changes when they assist their clients in the preparation of a provisional agreement for sale and purchase.
For more details on the coverage and impact of the 5-day clearing week, practitioners are advised to refer to the information leaflet 'Five-day Clearing Week', published by The Hong Kong Association of Banks. The leaflet is available from their website at www.hkab.org.hk for viewing under 'Customer Information'.