MAS Amends Notices on Residential Property Loans
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
Previous Article
MAS Announces Regulatory Approach for Payment Token DerivativesNext Article
PRA Amends Pillar 2 Capital Framework for BanksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
