Revised Regulatory Cap on Retail Deposits for Digital Full Banks and Other Safeguards for Consumers
Prime Minister's OfficeSpeakers
Summary
This question concerns the revised regulatory cap on retail deposits for digital full banks (DFBs) and consumer protection safeguards, as raised by Mr Melvin Yong Yik Chye. Deputy Prime Minister and Minister for Finance Lawrence Wong stated that the Monetary Authority of Singapore has increased aggregate deposit caps as DFBs demonstrated progress in building risk management capabilities. While specific aggregate caps remain confidential, an individual depositor limit of S$75,000 applies to align with the prevailing deposit insurance scheme limit. DFBs are also prohibited from conducting proprietary trading in their early years and must adhere to the same capital and liquidity requirements as traditional full banks. These regulations ensure that DFBs scale their core businesses in a risk-appropriate manner while protecting the interests and deposits of the public.
Transcript
57 Mr Melvin Yong Yik Chye asked the Prime Minister (a) what is the revised regulatory cap on retail deposits for digital full banks; and (b) given the increase in the regulatory cap, what additional safeguards has MAS put in place to ensure that customers’ deposits are protected in the event of a digital full bank’s default.
Mr Lawrence Wong (for the Prime Minister): The Monetary Authority of Singapore (MAS) requires a digital full bank (DFB) to progressively build up its business model and risk management capabilities as it grows. This recognises that DFBs are new startups with non-bank parents and have no track record in banking.
The two DFBs, GXS Bank and MariBank, were subject to an initial aggregate deposit cap of $50 million imposed by MAS when they first commenced operations, to safeguard consumers’ interests. As the DFBs made progress in building their risk management capabilities, MAS has increased their aggregate deposit caps. MAS does not disclose the specific aggregate deposit cap for each DFB, as is our approach for other supervisory conditions imposed on individual banks.
Aside from the aggregate deposit cap, each DFB must comply with a cap on the deposits of an individual depositor of S$75,000. This is the prevailing limit of the deposit insurance scheme, which the DFBs are members of. The DFBs’ business operations in their initial years are also subject to other restrictions, such as not conducting proprietary trading activities, so that the DFBs focus on scaling their core businesses in a risk appropriate manner. In addition, a DFB is subject to the same prudential requirements, such as those on capital and liquidity, as other full banks in Singapore.