HONG KONG, Nov. 7 (Xinhua) -- The Deposit Protection Scheme in Hong Kong has been operating smoothly since its inception last year and needs no adjustment, Hong Kong Secretary for Financial Services and the Treasury KC Chan said here Wednesday.

He told legislators that the scheme fund reached 374 million Hong Kong dollars (48.26 million U.S. dollars) in March and is expected to reach the target 1.3 billion Hong Kong dollars (167.74 million U.S. dollars) as scheduled in three years. He pointed out that it has enhanced public confidence in placing deposits with small and medium banks.

According to an opinion survey commissioned by the Deposit Protection Board in June, 50 percent of respondents considered bank deposits more secure after introducing the scheme and 65 percent found greater confidence in placing deposits with small and medium banks.

Chan said although competition in the local banking industry is intense, the board has received no comment on or complaint about banks passing the cost of the scheme on the depositors.

Under the existing scheme compensation up to a maximum of 100,000 Hong Kong dollars (about 12,903 U.S. dollars) will be paid to each eligible depositor in case of failure of a member bank. Chan said that the limit has been determined after extensive consultation and the board considers there no need to adjust it.