THE central bank has deemed DBS, OCBC and United Overseas Bank (UOB) as well as four foreign banks as institutions that have a major impact on Singapore's economy and financial stability.
The list of what are known as Domestic Systematically Important Banks (D-Sibs) also includes Citibank, Malayan Banking (Maybank), Standard Chartered and HSBC. The Monetary Authority of Singapore (MAS) has also imposed stricter requirements on these banks.
Banks that have a significant retail presence must locally incorporate their operations. Locally-incorporated D-Sibs will have to comply with rules such as a requirement for minimum total capital adequacy ratio (CAR) at 10 per cent - higher than the 8 per cent required under the latest Basel III international standards.
All three local banks have CARs that are comfortably above these requirements.
Other rules require D-Sibs to develop recovery and resolution planning in order to ensure the continuity of functions that are critical to the economy.
"MAS will allow a transition period for affected banks to comply with the requirements that are currently not in effect, such as the local incorporation requirement," it said yesterday.
Maybank and HSBC have yet to locally incorporate their operations.
Despite the added compliance costs, Maybank welcomed the MAS move.
"Maybank sees Singapore as a key market, and an important gateway to the rest of the region. The local incorporation signifies a further deepening of our roots in Singapore," a spokesman said.
He added that Maybank is in talks with the MAS to incorporate its business here.
This article was first published on May 1, 2015.
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