The move is aimed at tightening controls on the sale of high-risk products at bank counters after a mis-selling scandal involving equity-linked securities tied to Hong Kong’s H Index.
The FSS announced the plan on 9 at its “2026 banking sector financial supervision briefing,” outlining its supervision and inspection priorities.
The watchdog said it will step up monitoring of sales of complex investment products. It will review how banks are operating a system that limits in-person sales of high-risk products to designated hub branches, and will closely examine sales volumes, excessive promotions, and consumer complaints and dispute cases. During regular inspections, it will form a dedicated consumer protection team to comprehensively review safeguards across the full process of product design, screening and sales.
The FSS also said it will strengthen protection of consumer rights by checking business practices that hinder customers from exercising rights, including delays in handling requests for interest-rate reductions and cancellations. It said inspections will also cover whether banks properly provide guidance on debt restructuring under the Personal Debtor Protection Act and whether procedures for managing delinquent loans are appropriate.
To support financial system stability, the FSS said it will encourage banks to calculate and manage debt service ratio, or DSR, for internal control purposes and will guide them to set DSR management standards by loan type. It also plans to review quarterly provisioning levels and liquidity management, and to analyze how a high exchange-rate environment and inclusion in the World Government Bond Index, or WGBI, could affect the foreign exchange market.
Governance and internal controls at banks will also be reviewed. The FSS said it will check progress and implementation of reforms focused on board independence, fairness and transparency in selecting chief executives, and the reasonableness of performance-based pay.
* This article has been translated by AI.
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