Comments by MAS on Covid-19 (Temporary Measures) Bill
Singapore, 1 April 2020... In response to media queries about the implications of the COVID-19 (Temporary Measures) Bill on the financial sector, the Monetary Authority of Singapore (MAS) said that the proposed Bill will provide needed temporary protection for SMEs while being carefully scoped to avoid impairing the interests of banks and Singapore’s role in international financial transactions.
2 The proposed Bill covers only SME loans with specific security located in Singapore, namely commercial or industrial property in Singapore, or plant, machinery or fixed assets in Singapore that are used for business purposes
3 The contractual rights of banks are not affected, other than the right to commence legal action for a default on a loan covered under the proposed Bill, which is put on hold during the prescribed six-month period. Banks’ contractual right to charge fees and interest for non-payment or late payment of loan obligations due is unaffected.
4 SMEs seeking the protection of the proposed Bill for their security should therefore bear in mind that they may incur late charges and higher interest, and end up paying more in the future. SMEs who face cash flow difficulties should actively engage their banks to explore the options available under the package of relief measures announced by MAS, which include the deferment of principal repayment, with a corresponding waiver of late charges.
5 Apart from the secured SME loans specified above, the proposed Bill has no implications for banks on any of their other facilities, transactions, or contracts, or for Singapore’s role as an international financial centre.