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Singapore Banking Act

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HomeBrud.gifSingapore LawBrud.gifActsBrud.gifSingapore Banking Act

(CHAPTER 19)

(Original Enactment: Act 41 of 1970)

REVISED EDITION 2008

(31st March 2008)

An Act to provide for the licensing and regulation of the business of banks and related financial institutions, and the credit card and charge card business of banks and other institutions, and matters related thereto.

[1st January 1971]

PART I

PRELIMINARY

  • Section 1: Short title

This Act may be cited as the Banking Act.

  • Section 2: Interpretation

—(1) In this Act, unless the context otherwise requires —

“agreement” means an agreement whether formal or informal and whether express or implied;

“Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act (Cap. 186);

“bank” means any company which holds a valid licence under section 7 or 79;

“bank in Singapore” means —

(a) a bank incorporated in Singapore; or

(b) in the case of a bank incorporated outside Singapore, the branches and offices of the bank located within Singapore;

“bank incorporated outside Singapore” means a bank incorporated, formed or established outside Singapore;

“banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act;

“book” includes any record, register, document or other record of information and any account or accounting record, however compiled, recorded or stored, whether in written, printed form or on microfilm or by electronic process or otherwise;

“business day” means any calendar day other than a Saturday, Sunday, public holiday or bank holiday;

“capital funds” means —

(a) in the case of a bank incorporated in Singapore —

(i) in sections 31 and 33, its capital used for the purposes of calculating its capital adequacy ratio under section 10; or

(ii) in other sections of the Act, the aggregate of its paid-up capital (excluding any amount represented by treasury shares) and its published reserves (excluding such reserves as the Authority may specify by notice in writing), deduction having been made for any loss appearing in the accounts of the bank; or

(b) in the case of a bank incorporated outside Singapore, such net head office funds and such other liabilities as the Authority may, by notice in writing, specify;

“chief executive”, in relation to a company, means any person, by whatever name described, who —

(a) is in the direct employment of, or acting for or by arrangement with, the company; and

(b) is principally responsible for the management and conduct of the business of the company;

“company” means any company defined in any written law for the time being in force relating to companies, any company formed in pursuance of any Royal Charter or Letters Patent, and any company incorporated or registered under any written law in force in Singapore and includes any body corporate or unincorporate, whether incorporated, formed or established outside Singapore;

“corporation” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“credit facilities” means —

(a) the granting by a bank of advances, loans and other facilities whereby a customer of the bank has access to funds or financial guarantees; or

(b) the incurring by a bank of other liabilities on behalf of a customer;

“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director;

“employee” includes an individual seconded or temporarily transferred from another employer;

“executive officer”, in relation to a company, means any person, by whatever name described, who —

(a) is in the direct employment of, or acting for or by arrangement with, the company; and

(b) is concerned with or takes part in the management of the company on a day-to-day basis;

“financial holding company” means a company belonging to a class of financial institutions approved as financial holding companies under section 28 of the Monetary Authority of Singapore Act (Cap. 186);

“financial year” has the same meaning as in section 4(1) of the Companies Act;

“foreign company” has the same meaning as in section 4(1) of the Companies Act;

“foreign-owned bank incorporated in Singapore” means a bank incorporated in Singapore, the parent bank of which is incorporated outside Singapore;

“licence” means a licence granted or held under section 7 or 79;

“limited liability partnership” has the same meaning as in section 2(1) of the Limited Liability Partnerships Act (Cap. 163A);

“officer”, in relation to a corporation, includes —

(a) a director, secretary or an employee of the corporation;

(b) a receiver or manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and

(c) the liquidator of the corporation appointed in a voluntary winding up;

“parent bank”, in relation to a bank, means a financial institution which is able to exercise a significant influence over the direction and management of the bank or which has a controlling interest in the bank;

“parent supervisory authority” means —

(a) in relation to a bank incorporated outside Singapore, the supervisory authority which is responsible, under the laws of the country or territory where the bank or its parent bank is incorporated, formed or established, for supervising the bank or its parent bank, as the case may be; or

(b) in relation to a foreign-owned bank incorporated in Singapore, the supervisory authority which has consolidated supervision authority over the bank;

“partner” and “manager”, in relation to a limited liability partnership, have the respective meanings assigned to them in section 2(1) of the Limited Liability Partnerships Act;

“person” includes a corporation;

“place of business”, in relation to a bank, includes a head or main office, a branch, an agency, a representative office, a mobile branch of the bank, any office established and maintained for a limited period only and any other place used by the bank for the dispensing or acceptance of money on account or for the conduct of other banking business;

“published reserves”, in relation to a bank, means reserves which appear in the accounts of the bank which are duly audited or certified as correct by the auditor of the bank;

“qualifying subsidiary” means a company which is a subsidiary of a bank incorporated in Singapore where such bank meets the requirements under section 9(1);

“Registrar” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“related corporation”, in relation to a corporation, means a corporation that is deemed to be related to the first-mentioned corporation under section 6 of the Companies Act;

“savings account liabilities”, in relation to a bank, means the total deposits at that bank which normally require the presentation of passbooks for the deposit or withdrawal of moneys;

“share” has the same meaning as in section 4(1) of the Companies Act and includes an interest in a share;

“sight liabilities”, in relation to a bank, means the total deposits at the bank which are repayable on demand, but does not include savings account liabilities or the deposits of any other bank at the bank;

“subsidiary” has the same meaning as in section 5 of the Companies Act;

“substantial shareholder” has the same meaning as in section 81 of the Companies Act;

“time liabilities”, in relation to a bank, means the total deposits at the bank which are repayable otherwise than on demand, but does not include savings account liabilities or the deposits of any other bank at the bank;

“total number of issued shares”, in relation to a company, does not include treasury shares;

“treasury share” has the same meaning as in section 4(1) of the Companies Act. [2/84; 21/96; 23/2001; 5/2005; 1/2007]

(2) Without prejudice to any other meaning which the word “insolvent” may have, a bank shall, for the purposes of this Act, be deemed to be insolvent if either it has ceased to pay its debts in the ordinary course of business or is unable to pay its debts as they become due.

Part II APPOINTMENT OF ASSISTANTS

  • Section 3 Appointment of assistants

Part III LICENSING OF BANKS

  • Section 4 Licensing of banks
  • Section 4A Restriction on deposit-taking business and soliciting deposits
  • Section 4B Application of section 4A
  • Section 4C Examination of persons suspected of contravening section 4A and access to premises
  • Section 5 Use of word "bank"
  • Section 5A Use of bank name, etc.
  • Section 6 Examination of persons suspected of transacting banking business and access to premises
  • Section 7 Application for licence
  • Section 8 Licence fees
  • Section 9 Minimum capital requirements
  • Section 9A Capital requirements for qualifying subsidiaries
  • Section 10 Risk-based capital requirements
  • Section 11 (Repealed)
  • Section 11A Appeal to Minister
  • Section 12 Branches
  • Section 13 Fees to be paid in respect of branches of banks
  • Section 14 Mergers
  • Section 14A Approval by Minister for merger of certain banks
  • Section 14B Condition for issue of certificate of approval
  • Section 14C Effect of merger
  • Section 15 Application and interpretation of sections 15A to 18
  • Section 15A Control of substantial shareholdings in designated financial institutions
  • Section 15B Control of shareholdings and voting power in designated financial institutions
  • Section 15C Approval of applications
  • Section 15D Power to exempt and make further transitional provisions
  • Section 15E Objection to existing control of designated financial institutions
  • Section 16 Power to make directions
  • Section 17 Offences, penalties and defences
  • Section 18 Power of Authority to obtain information
  • Section 19 Amendment of bank’s constitution
  • Section 20 Revocation of licence
  • Section 21 Effect of revocation of licence

Part IV RESERVE FUNDS, DIVIDENDS, BALANCE-SHEETS AND INFORMATION

  • Section 22 (Repealed)
  • Section 23 Maintenance of adequate provision for bad and doubtful debts
  • Section 24 (Repealed)
  • Section 25 Publication and exhibition of audited balance-sheet
  • Section 26 Information to be furnished by banks
  • Section 27 Action to be taken if credit facilities or exposures are against interests of depositors
  • Section 28 Disclosure of interest by directors

Part V PROHIBITED BUSINESS

  • Section 29:Exposures and credit facilities
  • Section 30: Non-financial businesses
  • Section 31:Limit on equity investments
  • Section 32:Investments in companies undertaking non-financial businesses
  • Section 33: Immovable property
  • Section 34:Grace period for sections 30 to 33
  • Section 35 Exposure to immovable property sector
  • Section 36 Power of Authority to secure compliance with sections 10, 23, 29, 31, 32, 33, 35 and 42
  • Section 37 (Repealed)

Part VI MINIMUM ASSET REQUIREMENTS

  • Section 38 Minimum liquid assets
  • Section 39 Minimum cash balances
  • Section 40 Asset maintenance requirement

Part VII POWERS OF CONTROL OVER BANKS

  • Section 40A Interpretation of this Part
  • Section 41 Regulation of interest rates of banks
  • Section 42 Recommendations to banks concerning credits and investments
  • Section 43 Inspection of banks
  • Section 44 Special investigation of banks
  • Section 44A Provisions supplementary to sections 43 and 44
  • Section 45 Inspection in Singapore by parent supervisory authority
  • Section 46 Confidentiality of inspection and investigation reports
  • Section 47 Banking secrecy
  • Section 48 Information of insolvency, etc.
  • Section 48A Interpretation of sections 49 to 53
  • Section 49 Action by Authority if bank is unable to meet obligations, etc., or is conducting business to detriment of depositors
  • Section 50 Effect of assumption of control under section 49
  • Section 51 Duration of control
  • Section 52 Responsibilities of officers, member, etc., of bank
  • Section 53 Remuneration and expenses of Authority and others in certain cases
  • Section 54 Moratorium
  • Section 54A General provisions as to winding up
  • Section 54B Disqualification and removal of directors
  • Section 55 Notices to banks

Part VIIA TRANSFER OF BUSINESS AND SHARES AND RESTRUCTURING OF SHARE CAPITAL

Division 1 — Voluntary transfer of business of bank

  • Section 55A Interpretation of this Division
  • Section 55B Voluntary transfer of business
  • Section 55C Approval of transfer

Division 2 — Compulsory transfer of business of bank

  • Section 55D Interpretation of this Division
  • Section 55E Compulsory transfer of business
  • Section 55F Certificate of transfer
  • Section 55G Moratorium, avoidance of disposition of property, etc.

Division 3 — Compulsory transfer of shares in bank

  • Section 55H Interpretation of this Division
  • Section 55I Compulsory transfer of shares
  • Section 55J Certificate of transfer

Division 4 — Compulsory restructuring of share capital of bank

  • Section 55K Interpretation of this Division
  • Section 55L Compulsory restructuring of share capital
  • Section 55M Certificate of restructuring

Division 5 — Miscellaneous

  • Section 55N Power to obtain information under this Part
  • Section 55O Cessation of moratorium, etc., under this Part
  • Section 55P Regulations for this Part

Part VIII CREDIT CARD AND CHARGE CARD BUSINESSES

  • Section 56 Interpretation of this Part
  • Section 57 Restrictions on issuing and promoting credit card and charge card
  • Section 57A Application to be licensed credit card or charge card issuer
  • Section 57B Requirements for grant of licence
  • Section 57C Licence fees
  • Section 57D Power of Authority to issue written directions
  • Section 57E Revocation of licence
  • Section 57F Inspection and investigation
  • Section 57G Non-application of this Part

Part IX MISCELLANEOUS

  • Section 58 Auditing
  • Section 59 Clearing House settlements and control over Clearing House
  • Section 60 Declaration of holidays
  • Section 61 Priority of specified liabilities
  • Section 62 Priority of specified liabilities inter se
  • Section 62A Priorities for set-off in winding up of bank
  • Section 63 Redemption of securities held by bank under liquidation
  • Section 64 Execution of instruments under seal
  • Section 65 Disqualification of executive officers and employees of banks
  • Section 66 Offences by director and executive officers of bank and false or misleading information
  • Section 67 Offences by directors, employees and agents
  • Section 68 (Repealed)
  • Section 69 Composition of offences
  • Section 70 Publication of list of banks
  • Section 71 General penalty
  • Section 72 Offences triable in District Court
  • Section 73 Consent of Public Prosecutor
  • Section 74 Recovery of fees, expenses, etc.
  • Section 74A Power to refund, reduce, etc., financial penalty
  • Section 75 Operation of this Act not to affect Companies Act
  • Section 75A Service of documents, etc.
  • Section 75B Electronic service
  • Section 76 Exemption
  • Section 76A Authority’s powers of exemption
  • Section 77 Authority to approve operation of an Asian Currency Unit
  • Section 77A Amendment of Schedules
  • Section 78 Regulations
  • Section 79 Transitional licensing provisions

Schedules

  • Section FIRST SCHEDULE Banks
  • Section SECOND SCHEDULE Effect of Merger
  • Section THIRD SCHEDULE Disclosure of Information
  • Section FOURTH SCHEDULE Specified Provisions
  • Section FIFTH SCHEDULE Definitions in Sections 27, 28, 29 and 38

Related Acts

  • Monetary Authority of Singapore Act (Chapter 186, Revised Edition 1999)
  • Singapore Bills of Exchange Act (Chapter 23, Revised Edition 2004)