MAS relaxes rules allowing banks to invest in non-financial businesses.

financial businesses

MAS relaxes rules allowing banks to invest in non-financial businesses.

Singapore: The Monetary Authority of Singapore (MAS) has announced that it will streamline regulatory requirements to allow for banks in Singapore to invest in non-financial businesses that are associated with their core businesses. The amount will be capped at 10 per cent of the bank’s capital funds.

Under the new regulations, banks will be able to offer loans to consumers to make purchases without prior approval from the authorities. It is hoped that the move will improve consumers’ day-to-day shopping experience – such as being able to secure a bank loan to make a purchase of items online.

The authorities have been considering loosening the anti-commingling framework policy that was introduced back in 2001 to distinguish financial and non-financial businesses for banks.

According to Finance Minister Heng Swee Keat, the new regulations will “embed banking services into consumers’ day-to-day activities” to improve consumer spending.

Banks are in agreement with move, describing it as a “positive step” that will benefit banks’ efforts to seamlessly incorporate their services onto e-commerce platforms and improve their ability to reach out to more customers.

With the use of smartphones and other devices connected to the internet it is a logical decision for banking to start integrating itself into ecommerce platforms. The consultation paper detailing the new anti-commingling framework will be released by MAS in September this year.

Other analysts also echo positive sentiments regarding the move, saying that increasing competition from financial technology and e-commerce platforms, including Chinese-owned Alibaba, means that the transition was inevitable.

In a statement to Channel News Asia, Mr Liew Nam Soon of EY’s managing partner for financial services in ASEAN, said that“All this is about banks racing for the customer, ensuring that transactions are routed through them, rather than third-party payment gateways; capturing the treasure trove of customer transactions and preferences; and not being squeezed out of the value chain,”

Source: CAN/sk

Other news:
41 McDonald’s outlets in Delhi shut down due to expired licenses
6 Most Profitable Tech Trends of 2017

Justine Foong

Likes lone walks in the park. Doesn't think that waiting an hour in a line for food is worth any recommendation. Believes that a major breakthrough in Engineered Negligible Senescence will come within this lifetime.