Singapore: MAS Consults On Proposed Revisions To The Banking Regime

Last Updated: 26 February 2019
Article by Eric Chan

On 7 February 2019, the Monetary Authority of Singapore ("MAS") issued a consultation paper on proposed amendments to the Banking Act. The proposals are aimed at strengthening the licensing and regulation of banks and credit card or charge card licensees, formalising existing supervisory requirements and clarifying other technical and administrative issues.

This update outlines the key proposals in MAS's public consultation.

Expansion of grounds for revocation of bank licences

Currently, MAS may revoke a bank's licence on the following grounds specified in section 20 of the Banking Act, such as where the licensee:

(a) has ceased its banking business in Singapore;

(b) is carrying on its business in a manner likely to be detrimental to the interests of the depositors of the bank, or has insufficient assets to cover its liabilities to its depositors or the public;

(c) is contravening the provisions of the Banking Act; or

(d) has (in the case of a foreign bank branch) had its licence in its home jurisdiction withdrawn by its parent supervisory authority.

However, currently a gap exists as MAS has no express power to revoke a bank's licence for breaches of the Monetary Authority of Singapore Act ("MAS Act"), or if the parent bank of a Singapore incorporated foreign bank has had its licence withdrawn.

To enhance MAS's enforcement powers over banks and to provide clarity on circumstances under which MAS may revoke a bank licence, MAS proposes to expand the grounds set out in section 20 of the Banking Act, to include:

(a) contraventions of provisions of the MAS Act, which contains requirements such as those relating to antimoney laundering;

(b) for a foreign-owned bank incorporated in Singapore, when the parent bank's licence is withdrawn. This is in line with MAS's powers over foreign bank branches in Singapore; and

(c) when it appears to MAS that it is in the public interest to do so. This ground is currently available for cancellation, revocation, or withdrawal of licences, approvals, or recognition in respect of most other financial institutions.

Powers for MAS to approve 20% controllers and key appointment holders, and to remove key appointment holders, of credit card or charge card licensees ("CC Licensees")

Currently, MAS requires CC Licensees, through licence conditions, to notify MAS of changes to its controllers, directors and prescribed executive officers. In order to enhance MAS's ability to ensure the fitness and propriety of controllers and key appointment holders of CC Licensees, MAS intends to formalise these requirements in the Banking Act.

Locally incorporated CC Licensees will require MAS's approval for:

(a) a 20% control of shareholding and voting power in the licensee; and

(b) appointments of directors, the chairman of the board of directors, the chief executive officer, deputy chief executive officer, and any other prescribed person.

A foreign incorporated CC Licensee will require MAS's approval for the Singapore chief executive officer, deputy chief executive officer and any other prescribed person.

MAS also proposes to have the power to remove a director, chairman of the board of directors, chief executive officer, deputy chief executive officer and any other prescribed person of a CC Licensee, where the person no longer fulfils the fit and proper criteria. This is in line with the removal powers MAS has in respect of most other regulated financial institutions.

Revision to requirement for auditors to report material adverse developments affecting banks' financial soundness to MAS

Currently, auditors are required to report to MAS when they are satisfied that a bank has incurred losses that reduce that bank's capital funds by 50%. With the removal of the DBU-ACU (domestic banking unit / Asian currency unit) divide, the definition of capital funds for bank branches will be deleted. As such, MAS proposes to require auditors to report material adverse developments relating to banks' financial soundness. Material adverse developments include, but are not limited to, developments that affect banks' statement of financial position and their continued operations or viability, such as material losses, and material uncertainty related to asset valuations, asset recoverability, or funding adequacy.

For banks incorporated in Singapore, MAS will retain the requirement for auditors to report losses, where such losses reduce these banks' capital funds by 50% or more.

Revision to requirement for banks to publish audited accounts

Under section 25(2) of the Banking Act, banks are required to publish their latest audited annual balance-sheet, profit and loss account and other information ("Accounts") in newspapers. In recognition of the high Internet penetration in Singapore, MAS proposes to allow banks the alternative of publishing their Accounts on their websites.

For banks that choose to publish their Accounts on their websites, MAS proposes to require that they publish a notification statement in at least four local daily newspapers (ie a Malay, Chinese, Tamil and English local daily newspaper) for full banks, and in at least one local English language daily newspaper for any other bank. This would allow members of the public who rely on newspapers as a primary source of information to be notified of the publication of the bank's Accounts. The notification statement shall include the following:

(a) a statement that the published information is now available on the bank's website, and the link to its website; and

(b) a statement that the published information is available to any person upon request.

Proposals in relation to outsourcing arrangements of banks

Enhancement of MAS's powers

MAS proposes to introduce powers in the Banking Act to strengthen its oversight of banks' outsourcing arrangements. This will empower MAS to direct banks to comply with requirements in respect of their outsourcing arrangements through the issuance of an Outsourcing Notice ("Proposed Outsourcing Notice").

Streamline outsourcing requirements

Currently, item 3 of Part II of the Third Schedule of the Banking Act allows a bank to disclose customer information to its service providers, if the disclosure is solely in connection with the performance of its outsourced operational functions. Where the bank is disclosing such information to a service provider which is performing the outsourced function outside Singapore, it is required to comply with the conditions set out in MAS Notice 634.

The Proposed Outsourcing Notice for banks will incorporate existing requirements under MAS Notice 634. In order not to subject banks to two sets of overlapping requirements on outsourcing arrangements, MAS Notice 634 will be repealed when the Proposed Outsourcing Notice for banks takes effect. In this connection, MAS also proposes to amend item 3 of Part II of the Third Schedule of the Banking Act, to require banks to comply with the Proposed Outsourcing Notice, before they may disclose any customer information to their service provider, regardless of the location of the service provider.

This reflects MAS's intent for banks to pay due care to any outsourcing arrangement that involves the disclosure of customer information, regardless of the location where the outsourced function is performed. MAS proposes to make similar amendments in respect of merchant banks.

Please refer to our article on MAS's outsourcing proposals for more information.

Other proposed amendments

Other amendments proposed by MAS include:

(a) allowing employees of the Accounting and Corporate Regulatory Authority ("ACRA") to obtain complete bank audit work papers for the sole purpose of allowing them to perform their duties in inspecting external auditors of banks

This proposal is meant to enable ACRA employees to effectively review the auditors' work during their inspections by allowing them access to complete bank audit work papers. Only ACRA employees involved in the review will be allowed access to the customer information received, and these employees are prohibited from further disclosing such information.

(b) empowering MAS to impose funding requirements

Currently, MAS imposes the Net Stable Funding requirements through MAS Notice 652. MAS proposes to formalise its current power to impose such funding requirements on banks by inserting a new provision into the Banking Act, to ensure that a bank has a stable and sustainable funding structure for its activities.

(c) empowering MAS to impose requirements on related party transactions ("RPT")

MAS issued Notice 643 to all banks in Singapore in November 2016, to set out its requirements relating to transactions between the bank or entities in its bank group, with the bank's related parties. MAS Notice 643 will take effect on 1 July 2019. MAS proposes to formalise its power to impose RPT requirements by notice in writing, to any bank or class of banks, in section 27 of the Banking Act. At the same time, MAS will consolidate in the Banking Act, the list of persons who are subject to MAS's RPT and reporting requirements across the Banking Regulations and Notices, so as to facilitate banks' compliance with these requirements.

(d) specifying persons or class of persons subject to large exposures limits by MAS Notice

MAS proposes to be able to prescribe or specify by notice, any person or class of persons that is subject to the large exposures limits. This will provide flexibility to set out detailed requirements through notice.

(e) imposing additional leverage ratio requirements within the same MAS Notice

MAS proposes to impose additional leverage ratio requirements within the same MAS Notice setting out the leverage ratio requirement, rather than in a separate MAS Notice. Having all requirements related to the leverage ratio in one MAS Notice will facilitate banks' compliance with the requirements.

Consultation Period

The consultation closes on 8 March 2019.

A copy of the consultation paper can be assessed here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions