Parliamentary Replies
Published Date: 11 September 2017

Reply to Parliamentary Questions on Basic Banking Accounts and the interoperability of Automated Teller Machines




Date: For Parliament Sitting on 11 September 2017

Name and Constituency of Members of Parliament

Q 1439. Mr Ang Wei Neng, MP, Jurong GRC

Q 1407. Mr Patrick Tay Teck Guan, MP, West Coast GRC


Q 1439. To ask the Prime Minister how will the Ministry make it easier for residents to open and maintain bank accounts with low amounts of cash deposit.

Q 1407. To ask the Prime Minister whether MAS will consider converting all Automated Teller Machines (ATMs) to be usable by all major banks in Singapore and all of their customers instead of each bank building its own ATM network and customers having to search for ATMs of their banks resulting in duplication of capital, resources and customer inconvenience.

Answer by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:

1   According to World Bank estimates1, 96% of Singapore residents above the age of 15 have bank accounts. The figure would be higher for adults. Another source of information comes from the GST Voucher Scheme. About 40,000 Singaporeans have encashed the cheques they receive under the scheme, which could be because they do not have bank accounts.

2   To make it easy and affordable for Singaporeans to open bank accounts, major retail banks have offered Basic Banking Accounts or BBAs since 2002. While the exact features differ from bank to bank, these BBAs generally operate like normal savings accounts and offer unlimited ATM transactions, access to internet and mobile banking services.

3   The cost of opening and maintaining a BBA is very low. An individual needs only an initial deposit of $20, sometimes even less. For instance, DBS/POSB does not require any initial deposit for the opening of its POSB Everyday Savings Account. The bank also waives the account balance fall-below service fee for children, the elderly, full-time National Servicemen and recipients of public assistance.

4   Nonetheless, some Singaporeans remain unbanked. This may be due to low awareness of the availability of BBAs or by choice. The move towards electronic payments has necessitated a fresh look into our efforts to encourage Singaporeans to set up bank accounts. This needs to be done on a national basis, with the government working in partnership with the banks, retail merchants, and community leaders.

5   As a start, MAS will work with banks and community leaders to run outreach programmes, through community clubs, RCs and senior citizen centres, to assist those without a bank account to open an account.  

6   There is also a significant group, mostly the elderly, who have a bank account but rely primarily on cash to perform transactions. For this group, we  want to help them acquire the basic skills, as well as the confidence, to perform simple electronic transactions. IMDA has implemented the Silver Infocomm Initiative to promote IT awareness and literacy, including use of electronic transactions, among seniors aged 50 and above. To date, about 130,000 seniors have benefitted from the program. SkillsFuture Singapore will be running a national programme, called SkillsFuture for Digital Workplace, to help anyone gain confidence in the use of technology, including using mobile banking apps, signing up for PayNow, and making electronic payments. MAS will work with the industry and community leaders to further expand on these public outreach and education efforts.

7   The purpose of encouraging electronic payments is to bring about greater convenience for everyone. Electronic payments must therefore offer clear benefits over cash for consumers and merchants. They should be simple to use, cheap, and accepted everywhere.  When we achieve that, the need to go to an ATM will be far less, and this will greatly benefit the seniors.  One can just go directly to his or her favorite hawker stall and pay electronically with a card, mobile phone, or even a watch. 

8   Our agencies, especially MAS, SNDGO, NEA and HDB are working together to find ways to improve the day-to-day electronic payments experience in the heartlands, taking care to ensure that solutions should consider the needs of all, from the young to the old.  The agencies are also crowdsourcing ideas from the private sector, so as to co-create solutions that will make electronic payments ubiquitous at hawker centres, HDB coffee shops, and heartland shops.

9   To be clear, while we promote electronic transactions, the Government is not targeting to phase out cash entirely. There will always be a group of Singaporeans who face practical challenges in accessing digital banking services and cash will remain important to them. 

10   MAS will continue to monitor and work with the industry to ensure that basic cash services remain accessible to those who need them.

11   In this connection, Mr Patrick Tay asked if we should require all ATMs of banks to be inter-operable so as to make cash withdrawal points more accessible to residents.

12   We are actually approaching this from a position of advantage. Singapore is already well-served by ATMs. Our ATM coverage is significantly higher than in other city-states such as Hong Kong. The two biggest networks in Singapore are operated by DBS/POSB and UOB/OCBC. At least 90% of HDB households can find ATMs from both networks, ie an ATM from their own bank, within 500 metres of their homes. Many working adults and students will also have access to ATMs near their places of work or study or along their daily commutes.

13   The interoperability between the two local bank ATM networks is a further step that MAS has raised with the banks. It should yield efficiency gains in the system as a whole and allow for a redistribution of ATMs in the long term to maximise convenience to customers. However, to achieve efficiency gains, the number of ATMs may need to be scaled back in some locations, which  could affect queuing times in those places. 

14   Beyond ATMs, banks have also sought to improve Singaporeans' access to cash withdrawal services in other ways. They have partnered with major retail outlets such as 7-Eleven, Sheng Siong and Giant to offer fast and easy cash withdrawals as part of consumers' shopping experience.

15   Most fundamentally however, as I have mentioned earlier, we are working with the industry to develop widely accepted electronic payment options that are easy to use, even for the elderly. With more cashless alternatives, our reliance on cash for transactions, and the need for ubiquitous ATMs, should decline over time.

16   Singapore, as a compact city, needs to navigate this transition well and become a city ready for the future, and a bright spark in the digital world. At the same time, we will ensure that the transition is inclusive and no one will be left behind as we journey towards being a Smart Nation.

1 World Bank (2015), “The Global Findex Database 2014: Measuring Financial Inclusion around the World.” The World Bank drew on survey data collected in the 2014 Gallup World Poll.