MAS announced its intention to accept applications for new digital bank licenses until December 31, 2019. The new digital bank licenses, which will be extended to non-bank players, will ensure that the banking sector in Singapore continues to be resilient, competitive, and vibrant. MAS expects to announce the successful applicants in mid-2020. The successful applicants will be expected to commence business by mid-2021.
Digital full banks will be allowed to take deposits from and provide a wide range of financial services to retail and non-retail customer segments while digital wholesale banks will be permitted to serve small and medium enterprises and other non-retail segments. The new digital banks are in addition to any digital banks that Singapore banking groups may already establish under MAS’ existing regulatory framework. To be considered for a license, applicants must first meet the eligibility criteria for business track record, fit and proper shareholders, directors and management, capital commitment, a clear value proposition, and a sustainable business model. Applicants for a digital full bank license must additionally be anchored in Singapore, controlled by Singaporeans, and headquartered in Singapore. Eligible applicants will then be assessed for the following:
- Value proposition of the business model, incorporating the innovative use of technology to serve customer needs and reach under-served segments of the Singapore market that differentiates it from existing banks. MAS will also consider the ability of the applicant to implement the proposal.
- Ability to manage a prudent and sustainable digital banking business, including the level of understanding of key risks in banking business and the strength of regulatory compliance and risk management plans. MAS will also consider the reputation, track record, financial strength, and commitment of the shareholders of the applicant.
- Growth prospects and other contributions to financial center in Singapore, such as the jobs the entity will be bringing to Singapore, its commitment to develop the skills of the local workforce, the capabilities (including technology) it will be locating in Singapore, the headquarter functions it will be anchoring here, and its regional expansion plans.
Keywords: Asia Pacific, Singapore, Banking, Digital Banks, Bank Licenses, Fintech, Non-banking Institutions, MAS
Previous ArticleIASB Publishes Meeting Updates for August 2019
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.
EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS published a statement guidance on dividend distribution by banks.
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.