July 05, 2018

MAS amended Notices 645, 1115, 831, 128, 632, 115, and 825, along with the guidelines on the application of total debt-servicing ratio (TDSR) for property loans under Notices 645, 1115, 831, and 128 (TDSR Guidelines). MAS Notices 632, 115, and 825 are related to residential property loans and apply to banks, direct insurers, and finance companies, respectively. The amendments to the relevant notices and guideline will take effect on July 06, 2018.

MAS Notices 645, 1115, 831, and 128 require financial institutions to compute TDSR of a borrower applying for any credit facility set out in paragraph 3 of the Notices 645, 1115, 831, and 128. The TDSR will facilitate financial institutions’ assessment of the borrower’s repayment ability. It will also encourage financial prudence, as it will help to ensure that borrowers are not over leveraged in their property purchases. MAS expects financial institutions to have internal policies and procedures in place to implement the Notices. The TDSR Guidelines set out further expectations of MAS regarding a financial institution's application of the TDSR.

Financial institutions should incorporate the TDSR in their credit assessment frameworks for property loans. Financial institutions should set appropriate and prudent TDSR thresholds in credit assessment, to ensure that property loans granted are commensurate with the institutions’ risk appetite. Financial institutions should also set out clearly the rationale behind any differentiated TDSR thresholds applied, taking into consideration factors such as the risk profile of the borrower and purpose of the property loan. TDSR thresholds should be reviewed periodically to ensure their continued relevance.

 

Effective Date: July 06, 2018

Keywords: Asia Pacific, Singapore, Banking, Insurance, Residential Property Loans, TDSR Guidelines, Notice 632, Notice 115, Notice 825, Debt Service Ratio, MAS

Related Articles
News

FSB Chair Reports to G20 on Implementation of Financial Reforms

FSB published the letter to G20 Leaders and the opening statement from an FSB briefing by the FSB Chair Randal K. Quarles.

June 25, 2019 WebPage Regulatory News
News

FSB Summarizes Progress in Implementation of G20 Regulatory Reforms

FSB published a summary progress report on implementation of the G20 financial regulatory reforms.

June 25, 2019 WebPage Regulatory News
News

EBA Issues 2020 Stress Test Methodology and Templates for Discussion

EBA published the 2020 EU-wide stress test draft methodology, templates, and template guidance, for discussion with the industry.

June 25, 2019 WebPage Regulatory News
News

SRB Updates MREL Policy to Reflect Changes in CRR 2

SRB updated its policy on minimum requirement for own funds and eligible liabilities (MREL) as a result of the revisions in the recent Banking Package.

June 25, 2019 WebPage Regulatory News
News

OSFI Updates Manual of Reporting Forms and Instructions for Insurers

OSFI issued its annual update for 2019 to the manual of financial reporting forms and instructions for property and casualty (P&C) insurance companies.

June 25, 2019 WebPage Regulatory News
News

PRA Consults on PRA110 Reporting Frequency Threshold

PRA proposed (CP14/19) to amend the reporting frequency of PRA110 reporting template (PRA110) when a firm is in stress.

June 25, 2019 WebPage Regulatory News
News

APRA Updates Guidance on Managing Information Security Risks

APRA released an updated Prudential Practice Guide CPG 234 on managing information security risks, including cyber-crime.

June 25, 2019 WebPage Regulatory News
News

IMF Releases Report on 2019 Article IV Consultation with United States

IMF published its staff report in the context of the 2019 Article IV consultation with the United States.

June 24, 2019 WebPage Regulatory News
News

FCA and US Agencies on Addressing Issues in Credit Derivatives Market

U.S. SEC Chairman Jay Clayton, U.S. CFTC Chairman J. Christopher Giancarlo, and UK FCA Chief Executive Andrew Bailey issued a joint statement announcing plans to address concerns regarding opportunistic strategies in the credit derivatives markets.

June 24, 2019 WebPage Regulatory News
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms in the financial services sector.

June 23, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3315