SINGAPORE - The new total debt servicing ratio (TDSR) for property credit will not be extended to other types of loans any time soon, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.
After all, only about 5 per cent to 10 per cent of borrowers here are at risk of over-leveraging on their property purchases, he said.
"We don't intend to, any time soon, extend the TDSR to other types of loans, but it is really for the banks to factor it into their own internal assessments," Mr Tharman, who is also the Finance Minister, said on the sidelines of a Jurong grassroots event.
"Supervision is more useful when it comes to the broad range of loans, not just more and more rules," he said.
The TDSR framework, which was introduced last month for property loans, takes into account a borrower's total repayments such as mortgages, and car and student loans.
Banks have to check and ensure that the total monthly debt repayments of those taking up property loans do not exceed 60 per cent of their gross monthly income.
The Monetary Authority of Singapore had said earlier this month that it was closely monitoring the lending practices of banks and data trends for non-property loans, and may consider applying the TDSR rules for other loan types if the need arose.
Mr Tharman said yesterday that he hoped the banks would, apart from following the rules strictly, do it in the "right spirit for other loans" as well.