Additional Restricted Bank licences announced

20 October 1999...The Monetary Authority of Singapore (MAS) today announced that it has awarded four foreign banks with Qualifying Full Bank (QFB) privileges and another eight banks with Qualifying Offshore Bank (QOB) privileges. Eight new Restricted Banks (RB) were also announced today.
[Details of MAS' earlier announcement of QFB / QOB privileges and RB licences as well as MAS' assessment criteria are at Annex 1.]

Qualifying Full Banks (QFBs)

MAS will be awarding QFB privileges to the following four banks with immediate effect :-

1. ABN Amro Bank NV;
2. Banque Nationale de Paris;
3. Citibank NA; and
4. Standard Chartered Bank.

The QFB privileges allow the foreign banks to have additional branches and/or off-premise automated teller machines (ATMs), as well as to share ATMs amongst themselves.

Restricted Banks (RBs)

Due to the large number of strong applicants for RB licences, MAS will increase the total number of RBs to 20 instead of the 18 previously announced. MAS will be awarding eight new RB licences. In order to graduate the pace of liberalisation, four banks will receive their licences immediately. The remaining four banks will receive their licences in October 2000. The banks are:

1. To take effect immediately:
   
2. Commerzbank Aktiengesellschaft;
3. Morgan Guaranty Trust Company of New York;
4. Societe Generale;
5. UBS AG;
   
   To take effect on 1st October 2000:
   
6. Barclays Bank Plc;
7. The Fuji Bank, Limited;
8. Rabobank (Cooperatieve Centrale Raiffeisen-Boerenleenbank BA); and
9. The Sanwa Bank, Limited.

Qualifying Offshore Banks (QOBs)

MAS will be awarding the following eight banks QOB privileges with immediate effect :

1. The Bank of Nova Scotia;
2. Credit Lyonnais;
3. The Dai-Ichi Kangyo Bank, Limited;
4. The Industrial Bank of Japan, Limited;
5. KBC Bank NV;
6. National Australia Bank Limited;
7. Norddeutsche Landesbank Girozentrale; and
8. The Tokai Bank, Limited.

Future Applications

MAS also said today that applications for the remaining two QFB privileges and additional QOB privileges will be re-opened in January 2001. Banks which were unsuccessful in this round of evaluations may re-apply.

Today's announcement of new QFB / QOB privileges and new RB licences is a significant step forward in liberalising the commercial banking sector in Singapore. The liberalisation will promote the development of a more open and competitive financial sector, strengthen Singapore's banking system and provide Singaporeans with quality banking services. This is in line with MAS' vision to develop Singapore as a world-class financial centre.

BACKGROUND INFORMATION
BANKING LIBERALISATION PACKAGE

MAS announced on 17 May 1999 a programme to liberalise commercial banking in Singapore. This is aimed at promoting a more open and competitive environment and to spur the development and upgrading of local banks. The programme included a package of new banking privileges and licences for foreign banks, to be granted over 3 years (1999-2001). The new privileges and licences comprise:-

1. Qualifying Full Bank (QFB) privileges for up to 6 foreign banks;
2. Increasing the number of Restricted Bank (RB) licences from 13 to 18; and
3. Qualifying Offshore Bank (QOB) privileges for approved offshore banks.

Under the package, banks with QFB privileges will be allowed :

• up to 10 locations (branches and off-premise ATMs) of which up to 5 can be branches. No more than 2 new branches and 3 off-premise ATMs are to be set up each year following the issue of the QFB privileges. QFBs which already have more than 5 branches will be capped at their present number, but will be allowed up to 5 off-premise ATMs;
• Free re-location of existing branches;
• Sharing of ATMs amongst QFBs.

Offshore banks with QOB privileges will have their S$ lending limit raised to S$1 billion, from the present limit of S$300 million. QOBs will also be allowed to accept S$ funds from non-bank customers through swap transactions.

On 1 June 1999, MAS invited foreign banks to apply for QFB and QOB privileges, as well as new RB licences. In response, MAS received applications from a total of 27 foreign banks. Several banks applied for more than one category of privilege / licence.

MAS evaluated the applications using the following criteria:-

1. Prudential Considerations: MAS took into account the bank's financial position, its credit ratings, capital and global asset size, reputation and track record.
2. Contribution and Commitment to Singapore: MAS considered the bank's current scope of activities and future plans in Singapore. In particular, weight was given to the Singapore office's responsibility for managing Asia Pacific or global activities, the extent of innovative activities undertaken and the bank's commitment to upgrade talent and develop core competencies in Singapore.