Bank structure in singapore Flashcards
(38 cards)
What is the 4 major banks in SG
Commercial banks,
Merchant Banks,
Representative Office of Banks, (Do not conduct services in SG)
Digital Banks
What is the 2 different banks under commercial bank?
Full liscence bank
Wholesale bank
Offshore bank (no longer exists)
What is a full liscence bank? (3 factors)
They provides full range of banking services.
They are able to provide Network for Electronic Transfer (NETS)
All local banks are full liscence bank
What is a wholesale bank?
May offer same services as FLB
They can offer SGD banking services to coporate customers
They can offer foreign currency banking services to ALL customers
Limited under wholesale license. Their business operations is limited to one physical location
There is restriction for FOREIGN full liscence bank what is the 2restriction?
There is a limited number of branches and ATM unlike local FLB
Foreign Banks can not offer Electronic Transfer (NET services)
What is the 2 special priviledge Foreign banks are able to get with Qualfying Full Bank status? (QFB)
They are able to increase the number of branches it can have compared to other foreign banks
They can offer additonal services like
1. Debit services through NETS Point-of-sales services (EFTPOS)
- Offer CPF related investments: Supplementary Retirement sheme and CPF investment scheme accounts
What is the restriction of wholesale banks
Not allowed to carry out SGD retail Banking activities and they cannot offer SGD banking service to retail customers
What is merchant bank
They are INVESTMENT BANKS that provide Financial services to coporate customers such as
a. Coporate finance
b. Issuing, distributing, underwriting share and bond issues
c. Merger and Acquisitions
d. Portfolio investment management
e. Trading
Most of them are subsidaries to foreign FIs
Is Merchant banks subjected to Min capital reserve (Set by BASEL) like commercial banks?
Explain what will happen.
NO. This would result in vulnerbility when suffering a big loss because there is no cushion of deposits to keep its liquid.
What is the restriction of merchant banks
They are not allowed to accept deposits from public except from banks, finance companies and shareholders
What is representative office
Their role is to promote trade between their home countries and region
What is 2 type of different digital bank
Digital full lisence bank
Digital wholesale bank
What is a digital full liscense bank
They are banks that is allowed to take deposits from and provide banking sevrices to retail and no retail customers
What is a digital wholesale bank
They can only deal with companies/coporate customers such as SME and non retail customers.
What is the eligibility of digital bank?
They have to have more than 3 years of track record in operating an existing business in the tech/e-commerce field
What is digital bank’s innovative plan?
To use tech to serve all types of customers.
What is 2 example of digital full lisence bank?
Grab singtel group
SEA (Subsidaries Shopee, Garena)
What are the 2 examples of digital wholesale bank
Ant Group - Jack Ma
Greenland group
What is the main assets hold by banks
Major bank assets - loans they provide
What is the main liability hold by banks
The deposits they recieve from depositors (Major source of funds for banks)
other sources of funds like shareholder capital and reserves (retained earnings)
Off balance sheet items
Financial obligations that do not appear on Bank’s balance sheet but only appears when an event occur as an asset/liability on balance sheet or as income/loss on P/L statement
What is the Min Capital Requirement for banks in SG and banks outside SG
Banks in SG - not less than 1500 million
Banks outside SG -
Issued and paid up capital not less than 200 milion
Must have at least 10 mil set aside - net head office funds
Key provision for banks based on capital requirement
Capital adequacy ratio (CAR)
What is the goal of CAR (Capital Adequcy Ratio)
To protect international financial system from problems that might arise should a major bank or a series of bank collapse.
To ensure banks have enough capital for the risks of exposing itself through their practice of loaning and investment
