MAS Extends Loan Facility, Imposes Additional Requirement on DBS Bank
The Monetary Authority of Singapore (MAS) announced that it will further extend the MAS SGD Facility for Enterprise Singapore Loans to complement the six-month extension of the Temporary Bridging Loan Program (TBLP), from April 01, 2022 to September 30, 2022. The SGD Facility will continue to provide SGD funding to eligible financial institutions for a two-year tenor. A revised interest rate of 0.5% per annum will apply for funding provided from the May 2022 application window onward. In addition, MAS has imposed an additional capital requirement on DBS Bank Ltd, following the widespread unavailability of DBS Bank’s digital banking services during November 23-25, 2021.
MAS will require DBS Bank to apply a multiplier of 1.5 times to the risk-weighted assets for operational risk. This translates into an additional amount of approximately SGD 930 million in regulatory capital (based on reported financial statements as at September 30, 2021). MAS noted deficiencies in DBS Bank’s incident management and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged duration of the disruption. MAS has directed DBS Bank to appoint an independent expert to conduct a comprehensive review of the incident, including recovery actions of the bank. The independent review is required to assess how a similar incident can be prevented in future. DBS Bank must rectify all shortcomings identified from the review and implement measures to ensure that any future disruption to its digital banking services is resolved quickly and adequately. The additional capital requirement will be reviewed when MAS is satisfied that DBS Bank has addressed the identified shortcomings.
Keywords: Asia Pacific, Singapore, Banking, Covid-19, SME, Credit Risk, Regulatory Capital, Lending, Basel, Operational Risk, Business Continuity, Operational Resilience, Regtech, DBS Bank, MAS
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