The Singapore banking system is one of the top-notch systems globally, with high levels of security and stability.
There are various types of banks in Singapore, grouped into domestic and foreign banks. All commercial banks in the country are under the supervision of the Monetary Authority of Singapore.
This article will give you the general structure of the Singapore banking system and introduce a new growing type of bank in the city-state.
1. A glance at the Singapore Banking System
Singapore is known for being a financial hub in Asia with strong international links. The country is home to most Asia regional headquarters and has been the gateway for foreign businesses to access the Asian market. This is probably one of the main reasons why you are heading to the country for company incorporation.
There is hardly any other sector in the economy that contributes to this success more than its banking system does. The banking system of Singapore is widely known for providing world-class services for customers both inland and abroad.
Two major factors lead to the success of the Singapore banking system:
Security and Stability – For many years in a row, Singapore has dominated the top rankings in the world’s safest banks. Indeed, its banking system is part of Singapore’s world-class rule of law and anti-corruption policies.
High Level of Secrecy – The confidentiality of customers is ensured in section 47 of the Banking Act. Unless there is solid ground proving a case of tax evasion or financial crime, customer information is not disclosed to the public.
Read more on our article Quick Guide to Opening a Corporate Bank Account in Singapore
2. The Overview of Banking Regulatory Structure
Before you enter Singapore for the incorporation, it’s important to understand how banking system is regulated in the country. In this way, you can avoid unexpected mistakes while obtaining a bank account for your business.
In Singapore, all legislative bills go through the Parliament before effectively becoming a law or act. The banking sector has to comply with relevant banking legislation under the Monetary Authority of Singapore.
2.1. The Central Bank of Singapore
The Monetary Authority of Singapore (MAS) is the central bank of Singapore which was officially established in 1971. The MAS has the authority of overseeing all financial institutions in Singapore, while ascertaining that the country’s price stability is aligned with the long-term development of the economy.
There are four main functions that the MAS holds:
Implement monetary policies;
Manage Official Foreign Reserves;
Issue Singaporean currency;
Oversee payment systems.
2.2. Major Banking Regulations
These legislations not only regulate the banking industry but also foster its growth as a leading global center. Here are some crucial acts governing Singapore’s banking system:
Banking Act;
Securities and Futures Act – used for the reference of regulations of the securities and derivatives sector;
Payment Services
Act;
Monetary Authority of Singapore Act – used to establish the Monetary Authority of Singapore (MAS) and grants it the authority to regulate the industry of financial services in Singapore.
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