On 21 Nov 2025, the HKMA endorsed enhancements to the Interbank Debt Relief Plan framework, mandating all retail banks (including digital banks) and major money lenders to participate in the digitalised IDRP process. The updates revise the Approach and IDRP Agreement to prevent premature repayment demands, require AIs to act as Lead Participants where feasible, and enforce best practices for efficient case handling and consumer awareness of debt relief options.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SPOTLIGHT ON
FAMILY OFFICES
Introduction and Framework Enhancement
On 21 Nov 2025, the Hong Kong Monetary Authority (HKMA) issued a circular endorsing enhancements to the Interbank Debt Relief Plan (IDRP) framework, which supersedes the HKMA’s circular dated 31 October 2002. The circular details updates to the Hong Kong Approach to Consumer Debt Difficulties (the 'Approach'), jointly developed by the Hong Kong Association of Banks (HKAB) and Industry Associations, with HKMA’s strong support. These enhancements expand IDRP participation to all retail banks (including digital banks) and major money lenders offering consumer credit, digitalise the IDRP process for electronic documentation and signatures, and reinforce HKMA’s expectations for Authorized Institutions (AIs) to adopt the updated framework.
Revised Approach and IDRP Agreement
The HKMA expects all AIs offering consumer credit products to adhere to the revised Approach and IDRP Agreement, which have been updated to reflect evolving legal, regulatory, and market conditions. The HKMA specifically mandates that AIs must not hastily demand immediate repayment, reduce credit lines, or actively recommend balance transfers when customers face genuine repayment difficulties across multiple institutions. Instead, AIs must follow the IDRP Agreement framework, with the updated list of Creditor Participants now maintained in HKAB’s Member Area for transparency and accessibility.
Lead Participant Requirements
The HKMA strongly encourages all AIs active in consumer lending to serve as Lead Participants in IDRP negotiations, where one institution negotiates terms on behalf of all creditors to avoid debtor burden. The HKMA notes increased adoption of this role and has made the updated list of Lead Participants available via HKAB’s Member Area to facilitate efficient IDRP implementation.
Best Practices and Consumer Awareness
To ensure timely resolution of debt cases, HKAB has issued best practices for handling IDRP cases, which the HKMA urges AIs to adopt to streamline negotiations and reduce documentation burdens. AIs are also required to provide customers facing repayment difficulties with clear information on IDRP through consumer guides and accessible digital resources (e.g., on their websites), consistent with the Approach and Supervisory Policy Manual IC-6.
View the full article:Source
