SINGAPORE Feb 14 Singapore will for the primary time permit foreign takeovers of non-bank finance firms as part of steps to strengthen their monetary resilience and operational flexibility, the central financial institution stated on Tuesday.
MAS will retain other regulatory restrictions on finance companies, comparable to restrictions on overseas forex exposures and derivatives buying and selling. To safeguard prudential requirements as finance firms grow, MAS may even require these firms to reinforce their corporate governance and danger administration, together with imposing stricter rules on related occasion transactions and limits on exposures to the property sector.
Finance corporations are licensed by MAS to take deposits and loans. Currently, there are three – Hong Leong Finance, Sing Investments and Finance and Singapura Finance, with combined property of S$sixteen billion. In Q2, 2016, finance companies accounted for almost S$7 billion in excellent loans to SMEs, which is about eight.5 per cent of whole loans to SMEs in Singapore.
After the announced modifications, which will be carried out in a number of levels starting this yr, the limit on the finance firms’ aggregate uncollateralized business loans will be raised to as a lot as 25 p.c of its capital funds, from the current 10 p.c, MAS said. The cap on such loans to a single borrower might be raised to as much as zero.5 p.c of capital funds, from the present S$5,000.
Treating consumers pretty when gathering debts: The Bureau will assess whether auto finance corporations are utilizing illegal debt assortment ways. The Bureau will probably be looking to ensure that collectors are counting on accurate information and using legal processes after they accumulate on money owed. The Bureau also will evaluate the repossession process, together with the practices of third-occasion service providers which might be employed to repossess autos.