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Contents

Long Title

Part I PRELIMINARY

Part II APPOINTMENT OF ASSISTANTS

Part III LICENSING OF BANKS

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

Part V PROHIBITED BUSINESS

Part VI MINIMUM ASSET REQUIREMENTS

Part VII POWERS OF CONTROL OVER BANKS

Part VIIA VOLUNTARY TRANSFER OF BUSINESS

Division 1 — Voluntary transfer of business of bank

Division 2 — Repealed

Division 3 — Repealed

Division 4 — Repealed

Division 5 — Miscellaneous

Part VIII CREDIT CARD AND CHARGE CARD BUSINESSES

Part IX MISCELLANEOUS

FIRST SCHEDULE Banks

SECOND SCHEDULE Effect of Merger

THIRD SCHEDULE Disclosure of Information

FOURTH SCHEDULE Specified Provisions

FIFTH SCHEDULE Definitions in Sections 27, 28, 29 and 38

Legislative History

Comparative Table

Comparative Table

 
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PART V
PROHIBITED BUSINESS
Exposures and credit facilities
29.
—(1)  The Authority may by notice in writing to any bank in Singapore, or any class of banks in Singapore, impose such requirements as may be necessary or expedient for the purposes of limiting the exposure of the bank, or a bank within the class of banks, to any one or more of the following:
(a)
where the bank is incorporated in Singapore, a substantial shareholder group of the bank;
(b)
the financial group of the bank;
(c)
a director group of the bank;
(d)
any other person or class of persons as may be prescribed.
[1/2007]
(2)  Without prejudice to the generality of subsection (1), the Authority may in a notice issued under that subsection —
(a)
specify the limit on any exposure;
(b)
exclude any exposure from any limit;
(c)
specify the method of measuring any exposure;
(d)
exclude any bank or class of banks from any requirement imposed under subsection (1); and
(e)
vary any limit in a particular case.
[1/2007]
(3)  A bank in Singapore shall not grant any credit facility against the security of its own shares.
[1/2007]
(4)  The directors of a bank in Singapore shall, without prejudice to any liability of any of the directors under this Act or any law, jointly and severally indemnify the bank against any loss suffered by the bank arising from —
(a)
any unsecured credit facility granted to;
(b)
any credit facility granted, which subsequently becomes an unsecured credit facility, to; or
(c)
any exposure to,
any person in the director group of the bank whether or not the bank has contravened any requirement imposed under subsection (1) in relation to the director group of the bank.
[1/2007]
(5)  A director of a bank in Singapore who resigns or vacates his office shall continue to be liable to indemnify the bank under subsection (4) against any loss which the bank suffers —
(a)
before the resignation or vacation; or
(b)
after the resignation or vacation if the unsecured credit facility is granted, or if the credit facility becomes an unsecured credit facility, or if the exposure is acquired, during the period when he is a director unless —
(i)
the bank suffers the loss after it approves the continuation of the credit facility or exposure; and
(ii)
such approval is given by the bank after the resignation or vacation.
[1/2007]
(6)  Any bank which fails to comply with subsection (3) or any requirement imposed under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
[1/2007]
(7)  In this section —
“director group” has the meaning given to it in the Fifth Schedule;
“exposure” has the meaning given to it in the Fifth Schedule;
“financial group” has the meaning given to it in the Fifth Schedule;
“substantial shareholder group” has the meaning given to it in the Fifth Schedule.
[1/2007]
Non-financial businesses
30.
—(1)  No bank in Singapore shall carry on, or enter into any partnership, joint venture or other arrangement with any person to carry on, whether in Singapore or elsewhere, any business except for the following:
(a)
banking business;
(b)
any business the conduct of which is regulated or authorised by the Authority or, if carried on in Singapore, would be regulated or authorised by the Authority under any written law;
(c)
any business which is incidental to the business which the bank may carry on under paragraph (a) or (b);
(d)
any business or class of business as the Authority may prescribe, subject to such conditions as may be prescribed; or
(e)
any other business as the Authority may approve for the purposes of this section, subject to such conditions as the Authority may impose.
[23/2001; 1/2007]
(2)  Nothing in this section shall —
(a)
prevent a bank from holding any equity investment in a company in accordance with section 31; or
(b)
be construed as exempting a bank from any requirement which, apart from this section, the bank is required to comply with under any written law for the conduct of any business.
[23/2001]
(3)  Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
[23/2001]
Limit on equity investments
31.
—(1)  No bank in Singapore shall acquire or hold any equity investment in a single company, the value of which exceeds in the aggregate 2% of the capital funds of the bank or such other percentage as the Authority may prescribe.
[23/2001]
(2)  This section shall not apply to —
(a)
any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore;
(b)
any shareholding or interest acquired or held by a bank in Singapore in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; or
(c)
any major stake approved under section 32.
[23/2001]
(3)  The Authority may, by regulations —
(a)
provide for the manner of valuation of investments for the purposes of compliance with this section; and
(b)
exclude the operation of this section in respect of any investment or class of investments which may be held by any bank, subject to such conditions as may be prescribed.
[23/2001; 1/2007]
(4)  Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
[23/2001]
(5)  In this section, “equity investment” means any beneficial interest in the share capital of a company, and such other investment, interest or right as may be prescribed.
[23/2001; 1/2007]
Investments in companies undertaking non-financial businesses
32.
—(1)  No bank in Singapore shall acquire or hold, directly or indirectly, a major stake in any company without the prior approval of the Authority.
[23/2001; 1/2007]
(2)  The Authority shall not ordinarily grant its approval under subsection (1) if the company carries on, whether as its principal business or otherwise, any prohibited business.
[23/2001]
(3)  Notwithstanding subsection (2), the Authority may, in the circumstances of a particular case, grant its approval for a bank in Singapore to acquire or hold, directly or indirectly, a major stake in a company which carries on any prohibited business.
[23/2001; 1/2007]
(3A)  Any approval granted by the Authority under this section to a bank to acquire or hold, directly or indirectly, a major stake in a company may be subject to such conditions as the Authority may determine, including any condition relating to the operations or activities of the company.
[1/2007]
(3B)  The Authority may at any time add to, vary or revoke any condition imposed under subsection (3A).
[1/2007]
(4)  This section shall not apply to —
(a)
any interest held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore;
(b)
any shareholding or interest acquired or held by a bank in Singapore in the course of satisfaction of debts due to it which is disposed of at the earliest suitable opportunity; and
(c)
such other interest as may be prescribed.
[23/2001; 1/2007]
(5)  The Authority may, by regulations —
(a)
exclude the operation of this section in respect of any company or class of companies, subject to such conditions as may be prescribed;
(b)
provide for the manner of computation of major stakes; and
(c)
provide that any interest or control referred to in the definition of “major stake” in subsection (7), that is acquired or held, directly or indirectly, by a company in which a bank has, directly or indirectly, a major stake shall be deemed to be acquired or held by the bank.
[23/2001; 1/2007]
(6)  Any bank which contravenes this section or fails to comply with any condition imposed or prescribed under this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
[23/2001]
(7)  In this section —
“major stake” means —
(a)
any beneficial interest exceeding 10% of the total number of issued shares in a company;
(b)
control over more than 10% of the voting power in a company; or
(c)
any interest in a company, where the directors of the company are accustomed or under an obligation, whether formal or informal, to act in accordance with the bank’s directions, instructions or wishes, or where the bank is in a position to determine the policy of the company;
“prohibited business” means any business other than the businesses referred to in section 30(1)(a) to (d).
[23/2001; 1/2007]
(8)  This section shall not affect any acquisition or holding of a major stake which was approved by the Authority before 18th July 2001*.
*  Date of commencement of the Banking (Amendment) Act 2001 (Act 23 2001).
[23/2001]
Immovable property
33.
—(1)  No bank in Singapore shall acquire or hold interests in or rights over immovable property, wherever situated, the value of which exceeds in the aggregate 20% of the capital funds of the bank or such other percentage as the Authority may prescribe.
[23/2001]
(2)  For the purposes of determining the aggregate value of the interest in or right over immovable property referred to in subsection (1), there shall be excluded such portion of the value as may be attributable to the following:
(a)
any interest in or right over immovable property or any part thereof used for the purpose of conducting the business of the bank in Singapore or housing or providing amenities for its officers;
(b)
any interest in or right over immovable property held by way of security for the purposes of a transaction entered into in the ordinary course of the business of the bank in Singapore;
(c)
any interest in or right over immovable property held by way of enforcement of such security referred to in paragraph (b), provided that it is disposed of at the earliest suitable opportunity; and
(d)
such other interest in or right over immovable property as the Authority may prescribe.
[23/2001]
(3)  The Authority may make regulations to provide for the manner of valuation or apportionment of immovable property for the purposes of this section.
[23/2001]
(4)  Any bank which contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine of $10,000 for every day or part thereof during which the offence continues after conviction.
[23/2001]
Grace period for sections 30 to 33
34.
—(1)  Notwithstanding sections 30 to 33, where any business was carried on, or any property or investment was held, by a bank in Singapore immediately before 18th July 2001* with the approval of the Authority (where required) or which did not require the approval of the Authority, the bank may continue to carry on such business or hold such property or investment, as the case may be, for a period of 3 years from 18th July 2001.
*  Date of commencement of the Banking (Amendment) Act 2001 (Act 23 2001).
[23/2001]
(2)  The Authority may, on application by a bank in Singapore, extend the period referred to in subsection (1) for such further period as the Authority considers appropriate.
[23/2001]
(3)  The Authority may, in granting an application for extension under subsection (2) —
(a)
levy a charge of an amount not exceeding $10,000 for every day of the period of extension; or
(b)
impose such conditions as it considers appropriate.
[23/2001]
(4)  The Authority may, on application by a bank in Singapore, waive any requirement in section 30, 31, 32 or 33, on such conditions as the Authority may impose, where in the opinion of the Authority, the waiver is reasonably necessary for the bank to divest the business, property or investment referred to in subsection (1) by the end of the period referred to in that subsection or the further period referred to in subsection (2).
[23/2001]
Exposure to immovable property sector
35.
—(1)  The Authority may make such regulations as may be necessary or expedient for the purposes of limiting, in relation to a bank in Singapore, exposure to risks associated, directly or indirectly, with such immovable property as may be prescribed.
[23/2001]
(2)  Without prejudice to the generality of subsection (1), the regulations may —
(a)
prescribe a limit (referred to in this section as the property sector exposure limit) —
(i)
on the credit facilities that may be granted or issued by a bank in Singapore to such person or class of persons as may be prescribed; or
(ii)
on the notes, bonds, debentures, derivatives or other financial instruments that may be held by a bank in Singapore;
(b)
provide for the manner of computation for the purpose of determining whether the property sector exposure limit has been complied with;
(c)
provide for the Authority to vary the property sector exposure limit in the circumstances of any particular case;
(d)
provide for such transitional and consequential provisions as may be necessary or expedient; and
(e)
provide that a contravention of the regulations shall be an offence punishable, on conviction, with a fine not exceeding $100,000 and, in the case of a continuing offence, with a further fine of $10,000 for every day or part thereof during which the offence continues after conviction.
[23/2001]
Power of Authority to secure compliance with sections 10, 23, 29, 31, 32, 33, 35 and 42
36.
—(1)  Any bank in Singapore, if at any time called upon in writing by the Authority to do so, shall satisfy the Authority by the production of such evidence or information as it may require, that the bank is not in contravention of any of the provisions of section 29, 31, 32, 33, 35 or this section.
[2/84; 23/2001]
(2)  Without prejudice to sections 10, 23, 29, 31, 32, 33, 35 and 42, the Authority may, for the purpose of securing compliance with those sections on a consolidated basis, from time to time by notice in writing, require any bank to aggregate, in such manner as may be specified in the notice, its assets, liabilities, profits or losses, as the case may be, with the assets, liabilities, profits or losses of all or any of —
(a)
the bank’s related corporations; and
(b)
companies in which the bank acquires or holds, directly or indirectly, a major stake as defined in section 32(7).
[23/2001; 1/2007]
(3)  The bank shall comply with the requirement referred to in subsection (2) within such time as is specified in the notice.
[2/84]
Relief from limitations imposed by sections 29, 31 and 33
37.  [Repealed by Act 1 of 2007]