Singapore, 1 October 2007...The Monetary Authority of Singapore (MAS) has issued a consultation paper proposing to exempt card issuers from complying with the maximum credit limit when issuing credit or charge cards to individuals with an annual income of at least $120,000 or net personal assets exceeding $2 million^[1]. With the proposed exemption, card issuers may determine the appropriate credit limits for this higher income group in line with their assessment of the credit worthiness of these individuals. This proposal is part of MAS’ ongoing process of updating the credit card rules to ensure that they remain appropriate and relevant.

2   MAS recognises that the Government’s social policy to protect individuals from spending beyond their means and incurring unsustainable debt is best aimed at individuals that most need this protection. We consider that individuals with greater financial means should not require the same level of protection. In addition, the percentage of serious defaults among cardholders in this income group is generally very low.

3   MAS expects card issuers to adhere to stringent lending standards when issuing cards at a higher credit limit to this higher income group.  Such standards should include adopting rigorous credit evaluation criteria and robust credit risk management systems to effectively monitor and manage the risks and defaults of this group of cardholders.

4   MAS proposes to implement the above exemption at the same time as the other proposed changes^[2] to the Banking (Credit Card and Charge Card) Regulations.

5   Interested parties should forward their comments on the proposals in the consultation paper (Click here to view) (108.4 KB)  to MAS by 1st November 2007.

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^[1] To be applied on an on-going basis.
^[2] On 7 August 2006, MAS and the Ministry of Law issued a joint consultation paper proposing certain changes to the unsecured credit rules. Response to the consultation together with the final proposals were issued on 1 February 2007.