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     FrontPage Edition: Fri 18 June 2004

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Qualifying Full Banks can open up to 25 service locations from Jan 2005

Source: www.gov.sg 

DPM Lee Hsien Loong, Chairman MAS,
spoke at the Association of Banks in Singapore's 31st Annual Dinner, 17 June 2004

It is now three years since the last package of banking liberalisation measures in 2001.

Having assessed the state of the industry, MAS has decided to take a few further steps to liberalise the banking industry.

These are incremental adjustments to the earlier major liberalisation packages:

a. Firstly, from 1 January 2005, QFBs will be permitted to establish up to 25 service locations from the existing 15.

The 25 locations can either be brick-and-mortar branches or offsite ATM locations.  With 6 QFBs permitted to share ATMs amongst themselves, this could result in a QFB shared ATM network of about 150 locations across Singapore.  This provides QFBs with significant scope for expanding their presence in the domestic market.

b. Secondly, MAS is prepared to grant a limited number of new Wholesale Bank (WB) licences to applicants that meet our admission requirements.

c. Finally, QFBs will with immediate effect be allowed to negotiate with the local banks on a commercial basis to let their credit card holders obtain cash advances through the local banks' ATM networks.

Singapore now has one of the most liberal banking environments in Asia.  However, over time, as the industry changes, we must be ready to liberalise further.  MAS will reassess the environment before deciding on any further measures.

While it is still too early to make a final judgment, banking liberalisation has so far achieved its aim of bringing about greater competition.

It has fostered the consolidation of the local banks, which might otherwise have taken much longer.  The overall market shares of local and foreign banks have not changed drastically, but there has been an all-round qualitative improvement which has enhanced the vibrancy of Singapore's financial sector.

The liberalisation measures and reforms of the last few years have set the financial sector on a firm foundation.

However, we cannot afford to rest on our laurels.  Challenges as well as opportunities exist for both the banking industry and the financial sector as a whole.  We must identify and respond to them, in order to keep the financial sector dynamic and competitive.

Full text of speech

Source: Excerpted from Monetary Authority of Singapore (MAS) News Release 17 Jun 2004

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