MAS announced a package of measures, which are aimed at banks, insurers, and finance companies, to help ease the financial strain on individuals and small and medium enterprises (SMEs) amid the COVID-19 crisis. MAS and the financial industry have collaborated on this package, which has three components: help individuals meet their loan and insurance commitments, support SMEs with continued access to bank credit and insurance cover, and ensure interbank funding markets remain liquid and well-functioning.
With respect to help on with loan and insurance commitments, individuals with residential property loans may apply to their respective bank or finance company to defer either the principal payment, or both principal and interest payments, up to December 31, 2020. To support SMEs with access to bank credit and insurance cover, MAS has allowed SMEs to opt for deferral of payment of principal on secured SME loans by up to December 31, 2020. Banks and finance companies may apply for low-cost funding through a new MAS SGD Facility for loans granted under Enterprise Singapore’s SME Working Capital Loan scheme and Temporary Bridging Loan Program. Banks and finance companies can apply for these funds until the end of December 2020, provided they commit to pass on the savings in funding cost to their SME borrowers. To address the liquidity issues, MAS has been already providing ample SGD liquidity to the banking system through its daily money market operations and has significantly stepped up its provision of USD liquidity to the banking system
Keywords: Asia Pacific, Singapore, Banking, Insurance, COVID 19, Loan Repayment, SME, Credit Risk, Liquidity Risk, MAS
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