Singapore is an internationally renowned financial center that serves not only its domestic economy itself, but also the entire Asia-Pacific region. The banking industry is a key player in the country’s financial markets and quickly developed into one of the world’s most powerful industries. Factors such as a sound economic and political environment, favorable laws and tax policies, a clean system, and strict enforcement of crime and money laundering have helped Singapore to become Asia’s second-ranked international financial center (after Hong Kong). Today, as many as 117 foreign banks and six local banks dominate the banking industry.
Factors contributing to Singapore’s banking success include:
- Open up the local banking market.
- Local banks have strengthened their regional businesses through mergers and acquisitions.
- The expansion of foreign banks, some of which have made Singapore an important regional and global platform for banking services, has further enhanced competitiveness.
- Increasing competition has stimulated the development of innovative products and more competitive pricing models.
- In addition to traditional lending and depositing functions, it also provides comprehensive banking services such as corporate and investment banking.
- Strict bank secrecy laws, preferential tax policies, and a range of wealth management services have contributed to the prosperity of the private banking industry. The Swiss giants Credit Suisse Group and UBS AG have expanded Singapore’s private banking business to cater to the new needs of Asians and Europeans.
- Recognize and meet the needs of SMEs that make up Singapore’s sizable banking market.
Banking regulations and legislation
In Singapore, laws on banking can be found in relevant laws (and related subsidiary legislation) passed by Parliament, common law, and the principles and rules of equity. Common law and equity are derived from case law. These legislations not only regulate Singapore’s banking industry, but also ensure that Singapore’s banking legal framework is kept up to date with the latest developments in the financial sector. Relevant behaviors related to the banking industry include:
- Banking Law-The Banking Law (Chapter 19, 2003 revision) is the legislation governing Singapore’s commercial banks
- Monetary Authority of Singapore Act (Cap. 186, 1999)-governs all matters related to MAS and its operations
- Anti Money Laundering Regulations
- Payment and settlement system guidelines
- Securities and Futures Act
Role of the Monetary Authority of Singapore
In Singapore, the Monetary Authority of Singapore is the de facto central bank. It was established in 1971 to regulate Singapore’s financial industry to help it develop into an international financial centre. Its main function is to ensure that financial markets operate efficiently and smoothly in accordance with national economic goals. MAS is responsible for:
- Implement monetary policy
- Head of Banking System
- Banker to government
- Director of international reserve division
- Currency issuer
- Bank license issuer
- Lender of last resort
Singapore Major Bank
Major local banks
- DBS (DBS Bank) was established in 1968 and is considered to be the largest bank in Singapore and Southeast Asia in terms of assets. It is a leading consumer bank in Singapore and Hong Kong, with more than S $ 577 billion in assets under management in 2019. It also has Singapore’s largest retail network. Named the best bank in the world and Asia 2019 by Euromoney.
- OCBC (OCBC Bank) is the oldest Singaporean bank. It was established in 1932 and was formed by the merger of three local banks, the oldest of which was established in 1912. In terms of assets, it is now the second-largest financial services group in Southeast Asia and one of the highest-rated financial services groups in the world. Moody’s assigns Aa1. OCBC Bank is recognized as one of the 50 safest banks in global finance due to its strong financial strength and stability, and has been rated as the best managed bank in Singapore by The Asian Banker.
- UOB (United Overseas Bank) UOB was established in 1935 and has become a leader in the Asian banking industry. It also has subsidiary banks in Singapore, Malaysia, Indonesia, Thailand and China.
Major foreign banks
- HSBC HSBC – The Hongkong and Shanghai Banking Corporation Limited first opened in Singapore in December 1877. HSBC is a major dealer and a recognized bond intermediary (ABI) recognized by the Singapore Government Securities Market. It is QFB’s 33 awards in the 2006 Global Finance Awards by Global Finance.
- Standard Chartered Standard Chartered – Standard Chartered started its business in Singapore in 1859 and now has the largest network of international bank branches in the Republic (20). It is the group’s second largest consumer banking market and was awarded a Qualified Full Bank (QFB) license in 1999. It is Singapore’s largest foreign institutional custodian bank and has been ranked among the top for seven consecutive years in the Global Custodian’s Agency Bank Survey.
- ABN-AMRO Singapore-ABN AMRO is now owned by Royal Bank of Scotland, Santander and the Dutch government. At present, its various businesses around the world have been separated from ABN AMRO and integrated according to each owner’s plan.
- Maybank Maybank – Maybank’s business in Singapore started in 1960 and is a fully licensed commercial bank. Maybank is currently one of the top five banks in ASEAN and is a fully qualified bank in Singapore. As of June 2008, Maybank’s total assets in Singapore amounted to S $ 22.7 billion.
- BNP Paribas BNP Paribas – BNP Paribas has been at the forefront of Singapore’s banking industry since 1968 and was qualified for QFB in 1999. Today, BNP Paribas Singapore is the group’s regional hub investment bank in the corporate and commercial sector, as well as private banks.
- Citibank-Citibank was the first American bank to open a branch in Singapore in 1902. Although the retail banking industry is relatively late, the bank has grown into a strong market player, with major market shares in key businesses including unsecured loans, deposits, and investment and mortgage assets. Citibank was one of the first four foreign banks to obtain a Qualified Bank (QFB) license in 1999.
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