| |
|
|
|
 |
|
|
Home
»
Monetary Authority of Singapore
» Banking in Singapore |
|
Banking in Singapore
|
|
|
|
Commercial banks in Singapore
are licensed under and governed by the Banking Act. They may undertake
universal banking. Besides commercial banking, which includes deposit
taking, the provision of cheque services and lending, the banks may also
carry on any other business which is regulated or authorised by
MAS, including financial advisory services, insurance broking and
capital market services. (Section 30 of the Banking Act defines the
permissible activities).
Commercial banks and their
representatives do not have to be separately licensed to carry out such
activities, but must comply with the business conduct requirements
prescribed in the Financial Advisers Act (FAA), Insurance Act (IA) and
Securities and Futures Act (SFA) accordingly. In July 2001, the Banking Act
was amended to prohibit banks from engaging in non-financial activities.
Banks were given three years, until July 2004, to complete divesture of
their non-financial businesses. In August 2003, the grace period was
extended by two years to July 2006, for banks which have applied to the
MAS for extension.
Commercial banks in Singapore
operate as full banks, wholesale banks or offshore banks. |
|
|
|
Full Banks
Full banks may provide the whole range of banking business approved under
the Banking Act. There are currently 32 full banks in Singapore. Six of them
are locally-incorporated entities under the three local banking groups, and
one is a locally incorporated subsidiary of a foreign bank. The remaining 26
banks are branches of foreign-incorporated banks.
Eight of the foreign banks operating in Singapore have been awarded
Qualifying Full Bank (QFB) privileges. Foreign full banks with QFB
privileges may operate a total of 25 locations. They may also
• Share ATMs among themselves, and relocate their sub-branches freely.
• Negotiate with the local banks on a commercial basis to let their credit
card holders obtain cash advances through the local bank's ATM networks.
• Provide debit services through an EFTPOS network,
• Offer Supplementary Retirement Scheme and CPF Investment Scheme
accounts, and
• Accept fixed deposits under the CPF Investment Scheme and Minimum Sum
Scheme.
|
|
|
|
Wholesale Banks
Wholesale banks may engage in the same range of banking business as full
banks, except that they do not carry out Singapore Dollar retail banking
activities. They operate within the Guidelines for Operations of Wholesale
Banks issued by
MAS.
Offshore Banks
Offshore banks can engage in the same activities as full and wholesale banks
for businesses transacted through their Asian Currency Units (ACUs). The ACU
is an accounting unit, which the banks use to book all their foreign
currency transactions conducted in the Asian Dollar Market (ADM). The banks'
Singapore dollar transactions are separately booked in the Domestic Banking
Unit (DBU). For further information on these two accounting units of banks
in Singapore, please refer to Asian Currency and Domestic Banking Units.
The scope of business transacted in offshore banks' DBU has slightly more
restrictions on dealings with residents as compared with wholesale banks.
Offshore banks operate within the Guidelines for Offshore Banks issued by
MAS.
Under the banking liberalisation programme, offshore banks were given
greater flexibility in Singapore dollar wholesale business. Offshore banks
had their Singapore dollar lending limit raised to S$500 million. They are
now allowed to engage in Singapore dollar swaps in respect of proceeds
arising from the issue of Singapore dollar bonds managed or arranged by
them.
Merchant Banks
Besides the three categories of commercial banks, financial institutions may
also operate as merchant banks. Merchant banks are approved under the
Monetary Authority of Singapore Act and their operations are governed by the
Merchant Bank Directives. Their ACU operations are also subject to the
Banking Act.
The typical activities of merchant banks include corporate finance,
underwriting of share and bond issues, mergers and acquisitions, portfolio
investment management, management consultancy and other fee-based
activities. Most merchant banks have, with
MAS' approval, established ACUs, through which they compete with
commercial banks in the Asian Dollar Market. In their DBU, merchant banks
may not accept deposits or borrow from the public. However they may accept
deposits or borrow from banks, finance companies, shareholders and companies
controlled by their shareholders.
Finance Companies
Finance companies focus on providing small-scale financing, including
instalment credit for motor vehicles and consumer durables, and mortgage
loans for housing. Finance companies may not offer deposit accounts which is
repayable on demand by cheque, draft or order. They are licensed under and
governed by the Finance Companies Act.
Generally, finance companies are not allowed to grant unsecured credit
facilities exceeding S$5,000 to any person or deal in any foreign currency,
gold or other precious metals or acquire foreign currency denominated
stocks, shares or debt securities. They may however apply to
MAS for exemption to expand their scope of activities if they have the
risk management capability. Finance companies with capital funds of more
than S$100 million may apply for exemption to deal in foreign currencies or
precious metals and foreign currency -denominated stocks, shares or debt
securities. The exemption is conditional on the aggregate amount of foreign
currency exposure not exceeding 10 per cent of the finance company's capital
funds at any time.
|
|
|
|
|
|
|
|
|
DISCLAIMER
The content comes from Internet, reasonable efforts are made to maintain accuracy of information published.
However, information could contain errors or inaccuracies and is presented
without warranty and statutory means.
No liability is assumed for errors or omissions. Viewers are advised to
consult their banker or financial consultant for complete information and
their professional advise.
All trademarks, logos, brand names and copyrights are the property of their
respective owners. |
|
|
© 2011 - 2022 BankHeadOffice.com ® All
Rights Reserved |
|
|
|