THE Monetary Authority of Singapore (MAS) has proposed exempting card issuers from complying with the maximum credit limit for top tiers of wealthy individuals when issuing credit or charge cards.

This exemption will apply only to individuals with an annual income of at least $120,000 or net personal assets exceeding $2 million.

MAS made the proposal in a consultation paper issued on Monday.

It said card issuers may determine the appropriate credit limits for this higher income group after assessing the credit worthiness of these individuals.

It said the proposal is part of the process to update credit card rules so that they remain 'appropriate and relevant'.

'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,' it said.

However, going by the historical default data of major card issuers, it said the percentage of serious defaults among cardholders in this group is generally very low.

It felt that the level of protection should not be applied evenly across the board and those with greater financial means should not need the same level of protection.

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

MAS has proposed to implement the exemption at the same time as the other proposed changes to the credit card and charge card regulations.

Comments on the proposals in the consultation paper can be directed to MAS by Nov 1.

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