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 ArticleFASB Proposes to Extend CECL Standard Deadline for Certain Entities
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.