MAS published amendments to Notices 632, 632B, 645A, 825, 825B, 831A, 1106B, and 1115A related to the residential property loans in Singapore. The amendments shall take effect on April 06, 2020. Notices 825, 825B, and 831A apply to all finance companies in Singapore while Notices 632, 632B, and 645A apply to all banks in Singapore and Notices 1106B and 1115A apply to all merchant banks in Singapore. MAS also issued a statement that clarifies the application of the loan-to-value (LTV) limits and total debt servicing ratio (TDSR) for residential mortgages and mortgage equity withdrawal loans. This will help individuals and businesses explore options to meet their cash flow needs.
Notices 632 and 632B set out the rules for banks when granting residential property loans, including limits on loan amount, conditions for loans, and tenure of credit and refinancing facilities. Notices 825 and 825B sets out set out the requirements for finance companies to comply with when granting new and refinanced residential property loans, including LTV limits and loan tenure rules. Notice 1106B sets out rules for merchant banks when granting residential property loans to individuals and non-individuals. Notices 645A, 831A, and 1115A set out requirements on computing the TDSR for property loans for banks, finance companies, and merchant banks, respectively.
In its statement, MAS has provided the following clarifications:
- Small and medium-size enterprise (SME) borrowers are not subject to TDSR if they qualify for payment deferments on their secured property loans. This payment deferment relief was announced by MAS on March 31 as part of the financial industry’s relief package for SMEs.
- Businesses that take up mortgage equity withdrawal loans secured on residential or non-residential properties are not subject to TDSR and LTV limits. This is provided under MAS’ current rules to facilitate the provision of credit to businesses, some of which may rely on mortgage equity withdrawal loans to finance their operations.
- For individuals (including sole proprietors), TDSR will not apply to deferment of mortgage repayments (for residential, commercial, or industrial properties), refinancing of owner-occupied residential mortgages, mortgage equity withdrawal loans if the LTV ratio does not exceed 50%, and unsecured credit facilities.
Effective Date: April 06, 2020
Keywords: Asia Pacific, Singapore, Banking, Securities, Residential Property Loans, Merchant Banks, Debt Servicing Ratio, LTV, SME, MAS
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting