Singapore Banking System: History, Regulations, and Future

Singapore's banking system has a rich history dating back to the 19th century when the first bank, the Oriental Bank, was established in 1840.

The banking system has undergone significant changes since then, with the establishment of the Monetary Authority of Singapore (MAS) in 1970 to regulate and oversee the banking industry.

The MAS has implemented various regulations to ensure the stability and soundness of the banking system, including the requirement for banks to maintain a minimum capital adequacy ratio of 10.5%.

The Singaporean banking system has evolved to become one of the most advanced and efficient in the world, with a strong presence of international banks and a well-developed financial infrastructure.

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In Singapore, you'll find a diverse range of banks catering to different needs and preferences.

DBS, UOB, and OCBC are examples of local banks that provide essential financial services to individuals, businesses, and government agencies within the country.

These major local banks have a strong presence in Singapore and offer a wide range of services.

Foreign banks like Standard Chartered, HSBC, Citibank, and Maybank also operate in Singapore.

Digital banks like ANEXT, Maribank, Green Link, Trust Bank, and GXS are financial institutions that operate primarily online.

They provide banking services through digital platforms and without physical branch locations.

Neobanks such as Wise, Revolut, and YouTrip are fintech companies that offer digital and mobile-first financial services to customers.

These banks operate entirely online, providing a range of banking services like payments, money transfers, loans, and more through digital platforms and mobile applications.

Here's a breakdown of the different types of banks you'll find in Singapore:

To conduct banking business in Singapore, you'll need to get a license from the Monetary Authority of Singapore (MAS). This is a requirement for all banks operating in the country.

The MAS serves as both the sole bank regulator and the central bank of Singapore, overseeing financial institutions in the banking, capital markets, insurance, and payments sectors. They're responsible for setting and enforcing regulations and licensing requirements for these sectors.

To operate as a bank in Singapore, you'll need to comply with various regulatory frameworks, including the Banking Act 1970 and its subsidiary legislation. There are different categories of bank licenses, including full bank licenses.

Here are some of the prominent banking legislations and regulatory frameworks:

Singapore's digital banking landscape is rapidly evolving, with a growing number of people turning to online banking for convenience.

The penetration rate of online banking in Singapore has been steadily increasing, with an expected growth rate of 13.4% from 2014 to 2029.

Online banking has become a norm in Singapore, with many banks offering mobile apps and websites for customers to manage their accounts and conduct transactions.

The volume of FAST (Fast and Secure Transfer) transactions in Singapore has also seen a significant increase, reaching 2.2 million transactions in 2023.

The value of FAST transactions in Singapore has been steadily increasing, reaching SGD 1.2 billion in 2023.

Here are some key statistics on online banking and FAST transactions in Singapore:

Digital Full banks are a relatively new concept in Singapore, with three local banks currently holding a full bank license. Trust Bank was jointly launched by FairPrice Group and Standard Chartered Bank on 1 September 2022.

These banks offer a wide range of services, including online banking, and are fully licensed to operate in Singapore. GXS Bank, owned by Grab and Singtel, and MariBank, owned by Sea Ltd, are the other two digital full banks in Singapore.

Here's a brief overview of the three digital full banks in Singapore:

You can choose to bank with any of these digital full banks, depending on your personal preferences and needs.

The digital bank licence framework is a game-changer for the industry.

To get a digital bank licence, you need to find out about the framework, which is the foundation of the entire process.

The framework outlines the requirements and guidelines for digital banks to operate in a particular jurisdiction.

Digital banks need to meet these requirements to obtain a licence, which can be a complex and time-consuming process.

The digital bank licence framework is designed to ensure that digital banks operate in a safe and sound manner, protecting consumers and maintaining financial stability.

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Singapore's banking industry has witnessed a series of transformative events, policies, and legislation since the 1970s.

The 1970s marked a significant turning point in Singapore's banking industry, with the government's decision to liberalize the sector and allow foreign banks to operate in the country.

This move paved the way for international banks to set up shop in Singapore, bringing with them new technologies, expertise, and capital.

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In the early days of banking in Singapore, several institutions have ceased operations over the years.

The Bank of Singapore, which was incorporated in Singapore, is one notable example. It merged into Oversea-Chinese Banking Corporation and was renamed Singapore Island Bank.

The 1990s saw the closure of several banks, including the Keppel Bank Limited, which merged with Keppel TatLee Bank in 1998. Another bank that ceased operations during this period was the Tat Lee Bank Limited, which also merged with Keppel TatLee Bank in 1998.

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The year 2002 was a significant one for banking in Singapore, with the closure of the Overseas Union Bank Limited and the Industrial and Commercial Bank Singapore Limited, both of which merged into United Overseas Bank.

Some banks closed due to voluntary liquidation, such as the Kwong Yik Bank, which went out of business in 1913 after a bank run. Others, like the Islamic Bank of Asia, were merged into existing banks, in this case DBS Bank, in 2015.

Here is a list of some of the defunct banks in Singapore:

In the 1970s and 1980s, Singapore's banking industry experienced significant growth.

The government introduced policies to attract foreign banks and investments, which played a crucial role in this expansion.

During this period, Singapore emerged as a key player in the Asian Dollar Market, further solidifying its position as a regional financial hub.

The Monetary Authority of Singapore (MAS) was established in 1971, consolidating various financial regulatory functions into a single entity.

This move provided a clear regulatory framework for the banking sector, fostering trust among foreign investors and banks.

The establishment of the MAS helped to ensure a stable and secure financial environment in Singapore, which was essential for attracting foreign investments.

The 1990s was a decade of rapid technological advancements in the banking sector. Internet banking, electronic payments, and other digital banking services became increasingly popular as technology allowed.

Singaporean banks quickly adopted new technologies, offering innovative products and services to their customers. This led to a significant expansion in the use of digital banking services.

Banks in Singapore began expanding their operations in the region, capitalising on the growing economies of neighbouring countries.

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Singapore's private banking sector experienced significant growth in the 2000s, with major private banks like UBS, Credit Suisse, Citigroup, and Standard Chartered expanding their offerings.

Strict banking secrecy laws and non-recognition of the 2005 European Tax Directive made Singapore an attractive destination for high-net-worth individuals (HWNIs) from Asia, Europe, and the Middle East.

Generous tax incentives further supported the growth of private banking in Singapore.

The country emerged as a premier private banking destination, with a range of wealth management and advisory services available to clients.

High standards for investor confidence were maintained through measures like the Code of Corporate Governance and revisions to the SGX listing rules.

The Approved Bond Intermediary Scheme also played a key role in establishing Singapore as a key international debt arranging hub in Asia.

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In the 2010s, Singapore's local banking groups underwent significant consolidation, resulting in the six local banks merging into just three main banks: DBS, OCBC, and UOB.

These mergers allowed the banks to strengthen their capabilities and expand their range of business activities.

The consolidation also enhanced their risk management practices, giving them a stronger financial foundation.

With increased domestic competition, local banks began expanding overseas, taking their business to new markets.

Singapore's banking industry has also been a leader in FinTech innovation, focusing on sustainable banking and integrating environmental, social, and governance (ESG) factors into their practices.

The SORA Interest Rate Benchmark is a game-changer in the banking world. As of 2025, the Singapore Interbank Offered Rate (SIBOR) will be discontinued, making way for SORA to take centre stage.

This shift is part of a broader trend towards a SORA-centred SGD interest rate landscape.

Singaporean banks offer a wide range of financial services tailored to meet the needs of Small and Medium Enterprises (SMEs).

These services include deposit products, cash management services, and loan products, as well as trade financing services.

The Singaporean government has also introduced financing schemes to assist SMEs in their growth and modernisation endeavours.

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Singapore's banking services cater to both big players and small to medium enterprises.

Commercial banks in Singapore offer a range of financial services tailored to meet the needs of small and medium enterprises (SMEs), including deposit products, cash management services, and loan products, to trade financing services.

The Singaporean government has introduced financing schemes to assist SMEs in their growth and modernisation endeavours.

Total loans and advances of commercial banks to residents in Singapore have been steadily increasing from 2021 to 2024.

Here's a breakdown of the total value of loans and advances to residents in Singapore from August 2021 to December 2024 (in billion Singapore dollars):

Commercial banks in Singapore also offer consumer loans to residents, with the total value of consumer loans issued by commercial banks to residents in Singapore from August 2021 to December 2024 reaching a significant amount.

The total value of consumer loans granted by commercial banks to residents in Singapore as of December 2024, by type (in billion Singapore dollars), is as follows:

Commercial banks in Singapore also offer loans and advances to businesses, with the total value of loans and advances issued to the private sector by commercial banks in Singapore from August 2021 to December 2024 reaching a significant amount.

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The total value of loans and advances to businesses by commercial banks in Singapore as of December 2024, by sector (in billion Singapore dollars), is as follows:

It's worth noting that the non-performing loan (NPL) ratio in Singapore as of 3rd quarter 2024, by sector, is relatively low, indicating a healthy banking system.

Interest rates in Singapore have been fluctuating over the years. The real interest rates in Singapore have been decreasing since 2012, with a low of -0.3% in 2013.

Deposit interest rates in Singapore have also been trending downwards since 2007, with a low of 0.1% in 2021.

Banks in Singapore have been offering relatively low savings deposit interest rates, with an average of 0.1% in 2020.

Prime lending rates in Singapore have been decreasing since 2011, with a low of 0.8% in 2019.

Here's a breakdown of the interest rates in Singapore over the years:

Note that these rates are averages and may have varied depending on the bank and specific account type.

The banking industry in Singapore is highly developed and regulated. Singapore has a strong reputation as a global financial hub.

Singapore's banking industry is dominated by three major banks: DBS, UOB, and OCBC. These banks have a combined market share of over 90% of the country's banking assets.

Singapore's banking system is highly digitalized, with many banks offering mobile banking and online services to customers. This has made banking more convenient and accessible to people in Singapore.

The Monetary Authority of Singapore (MAS) regulates the banking industry in Singapore to ensure stability and soundness. The MAS has implemented various measures to promote financial inclusion and stability in the country.

Wholesale banks are a type of bank that offers a range of services, but with some restrictions. They can conduct the same services as full banks, except for banking activities in the Singapore Dollar.

Wholesale banks have a limited number of branches, with most having only one main branch. This is in contrast to full banks, which can have multiple branches.

Some examples of wholesale banks include Barclays Bank PLC, which is incorporated in the United Kingdom and has a local address at 1 Raffles Quay. Another example is Deutsche Bank Aktiengesellschaft, which is also incorporated in Germany and has a local address at 6 Shenton Way.

Here's a list of some wholesale banks in Singapore, along with their local addresses:

Most wholesale banks are incorporated overseas, with only a few having a local incorporation in Singapore.

The banking industry in Singapore has seen significant growth over the years. The value of bank assets in Singapore has been steadily increasing from 2014 to 2023.

According to the statistics, the GDP of the finance and insurance industry in Singapore has also been growing, reaching a high of 146.8 billion Singapore dollars in 2023. This growth is a testament to the industry's resilience and adaptability.

The total reserves in Singapore have been increasing from 2012 to 2023, reaching a high of 466.8 billion U.S. dollars in 2023. This increase in reserves demonstrates the country's financial stability.

In 2024, there were 144 commercial banks in Singapore, 73 of which were local banks and 71 were foreign banks. The number of banks has been steadily increasing over the years, reflecting the growing demand for financial services.

Here's a breakdown of the number of banks in Singapore by type from 2015 to 2024:

The banking industry in Singapore has also seen significant growth in terms of assets and liabilities. The total assets and liabilities of commercial banks in Singapore have been increasing from 2011 to 2021, reaching a high of 2,434 billion Singapore dollars in 2021.

The volume of credit and debit card payments in Singapore has also been growing, reaching a high of 12.6 billion payments in 2023. The value of these payments has also been increasing, reaching a high of 104.8 billion Singapore dollars in 2023.

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Singapore is a haven for fixed-income investors, offering an extensive range of investment options.

The country boasts an impressive array of Singapore government securities and foreign corporate bonds, providing a diverse range of investment avenues to cater to different risk appetites and investment horizons.

Fixed-income investors have a myriad of investment options to choose from, including Singapore government securities and foreign corporate bonds.

This wide availability of investment options makes Singapore an attractive destination for fixed-income investors seeking stable returns.

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In Singapore, you'll find five locally incorporated full banks, each owned by a different banking group. These banks are DBS Bank Limited, OCBC Bank, United Overseas Bank Limited (UOB), Bank of Singapore (part of OCBC Bank), and POSB (part of DBS Bank).

Each of these full banks has the freedom to offer a wide range of financial services, as permitted by the Banking Act. This means they can provide services like loans, credit cards, and investment advice.

Here's a quick rundown of the five full banks in Singapore:

Singapore's commercial banks offer a wide range of services, including standard commercial services, financial advisory, deposit-taking and lending, and capital market services. They also provide universal banking services.

Commercial banks in Singapore may undertake universal banking, such as taking deposits and providing cheque services and lending, as long as they are permitted under the Monetary Authority of Singapore. This is in line with the Banking Act.

The Monetary Authority of Singapore (MAS) regulates the banking industry and offers three types of banking: Full Banks, Wholesale Banks, and Offshore Banks. This regulation ensures that commercial banks operate within the law.

Singapore's commercial banks provide a variety of services, including financial advisory, deposit-taking and lending, and capital market services. These services cater to both individual and corporate customers.

There are presently five locally incorporated full banks in Singapore, owned by three banking groups. These full banks have the liberty to provide any financial service as permitted by the Banking Act.

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Here are some of the local full banks in Singapore:

Full banks can carry out the full range of activities approved under the Banking Act for both individual and corporate customers, at home and abroad. They have to comply with the Financial Advisers Act and the Securities and Futures Act.

Singapore is home to a diverse range of foreign banks, with a total of 119 commercial banks operating in the country.

These foreign banks are categorized into three types: Full banks, Wholesale banks, and Offshore banks. There are 28 Full banks, 54 Wholesale banks, and 37 Offshore banks in Singapore.

One of the notable features of foreign banks in Singapore is that they are restricted in terms of the number of branches and automated teller machines they can operate, compared to local banks.

Here's a breakdown of the number of foreign banks by their type:

Some of the well-known foreign banks operating in Singapore include Standard Chartered Singapore, Bangkok Bank Public Company Limited, and Bank of America, National Association.

Singapore's banking sector is quite liberal, allowing foreign banks to operate here. In fact, the government created a new category called Qualifying Full Bank (QFB) to accommodate them.

Qualifying Full Banks (QFBs) are foreign banks that have been granted licenses to operate in Singapore. The first four licenses were awarded in 1999 to ABN AMRO, Banque Nationale De Paris (now BNP Paribas), Citibank, and Standard Chartered Bank.

QFBs are permitted to operate up to 15 service locations. They can also share their ATM networks and provide services via the EFTPOS network.

Here's a list of some of the QFBs in Singapore:

In 2004, the QFB license was further liberalized, allowing QFBs to establish up to 25 service locations, with up to 10 branches.

Offshore banking in Singapore is a significant industry, with many international banks operating here. The Monetary Authority of Singapore (MAS) permits these banks to provide a full range of banking services to approved financial institutions.

Some notable offshore banks in Singapore include Absa Group, Agricultural Bank of China, and Arab Bank. These banks have a local address in Singapore, such as 80 Raffles Place or 9 Temasek Boulevard.

The MAS restricts the activities of offshore banks concerning persons who are not approved financial institutions. This means that these banks can only provide certain services to non-residents in Singapore.

Here's a list of some offshore banks in Singapore that are incorporated in their respective countries:

These banks have a significant presence in Singapore, with many having a local address and offering a range of banking services.

Merchant banks in Singapore are approved as financial institutions by the Monetary Authority of Singapore (MAS) under Section 28 of the Monetary Authority of Singapore Act.

Merchant banks are not licensed in the same way as commercial banks and are only permitted to engage in a limited number of activities as prescribed by the MAS.

Merchant banks may not accept sight or savings deposits or borrow from the public, but they can accept deposits or borrow from banks, finance companies, shareholders, and companies controlled by their shareholders.

Merchant banks in Singapore typically engage in corporate finance, underwriting of share and bond issues, mergers and acquisitions, portfolio investment management, management consultancy, personal banking, and other fee-based activities.

In Singapore, there are various types of deposit-taking institutions that cater to different needs and preferences. These institutions are regulated by the Monetary Authority of Singapore (MAS).

Local banks, such as DBS, UOB, and OCBC, are major players in the Singapore banking scene, providing essential financial services to individuals, businesses, and government agencies within the country. They have a strong presence in the market and offer a wide range of services.

Foreign banks, on the other hand, are also present in Singapore, with 119 commercial banks operating in the country. These banks are further categorized into Full banks, Wholesale banks, and Offshore banks. Full banks, like Standard Chartered, have the most extensive range of services and can offer most commercial banking services to clients.

Digital banks, such as ANEXT and Maribank, operate primarily online, providing banking services through digital platforms and without physical branch locations. Neobanks, like Wise and Revolut, are fintech companies that offer digital and mobile-first financial services to customers.

Here's a breakdown of the types of deposit-taking institutions in Singapore:

These types of deposit-taking institutions in Singapore cater to different needs and preferences, providing a range of services to individuals, businesses, and government agencies.

Singapore has a well-developed financial system with a wide range of financial institutions to choose from.

The Monetary Authority of Singapore (MAS) regulates and supervises these institutions, ensuring they operate within the law.

Accessing the list of financial institutions in Singapore is a straightforward process.

You can visit the MAS website to find a comprehensive directory of banks, financial institutions, and other licensed entities.

The directory provides information on the types of financial services offered by each institution, including banking services, investment products, and insurance.

With so many options available, it's essential to research and compare the services and products offered by each financial institution to find the one that best suits your needs.

The MAS directory is a valuable resource for anyone looking to make informed decisions about their financial dealings in Singapore.

Singapore has become a go-to destination for companies looking to list on a global stock exchange, with over 600 companies choosing the Singapore Exchange (SGX) as their preferred listing location.

The SGX is one of the most established capital markets in the Asia-Pacific region, boasting a robust regulatory framework that has earned the trust of international business entities.

This reputation has made Singapore an attractive hub for financial institutions, with its ability to attract and retain international business entities solidifying its position as a global financial hub.

The SGX's reputation and regulatory framework have created a favorable environment for companies to grow and thrive, making it an appealing choice for businesses looking to expand their reach.

In fact, the SGX's popularity as a listing destination underscores Singapore's appeal as a global financial hub, drawing in companies from around the world.

Singapore's banking sector is known for its robust security measures, with banks required to implement a range of controls to protect customer data.

The Monetary Authority of Singapore (MAS) oversees banking security and compliance, ensuring that banks adhere to strict guidelines to prevent cyber threats.

Banks in Singapore are also required to maintain a minimum capital adequacy ratio of 7%, which helps to ensure that they have sufficient funds to cover potential losses.

This stringent regulatory environment has earned Singapore's banking sector a reputation for being one of the safest in the world.

Compliance toolkits are designed to guide banks through the process of understanding and complying with various requirements and timelines set by the Monetary Authority of Singapore (MAS).

These toolkits aim to facilitate banks' compliance with MAS approval, notification, and reporting requirements.

By using compliance toolkits, banks can ensure they meet the necessary standards and avoid any potential issues.

Managing risks associated with third-party and outsourcing arrangements is crucial for financial institutions. The Monetary Authority of Singapore (MAS) sets requirements for how these risks should be managed.

Financial institutions must find out about MAS requirements and expectations for managing third-party and outsourcing risks. This includes understanding the potential risks and taking steps to mitigate them.

Effective third-party risk management involves identifying, assessing, and mitigating potential risks. This includes conducting thorough due diligence on third-party vendors and service providers.

MAS requirements for third-party risk management are critical for maintaining banking security and compliance. By following these requirements, financial institutions can reduce the risk of security breaches and reputational damage.

The Monetary Authority of Singapore (MAS) is a trusted institution, but scammers are impersonating MAS officers to trick people into revealing sensitive information.

The Singapore Police Force and MAS warn the public about this Government Official Impersonation Scam variant.

You can verify the legitimacy of MAS officers by checking the list of financial institutions regulated by MAS and the regulated activities they are authorized to provide.

MAS is responsible for regulating financial institutions, so it's essential to be cautious when receiving calls or messages claiming to be from MAS.

Singapore offers a variety of schemes and initiatives to attract financial institutions to set up or expand their operations in the country.

One such scheme is the tax incentives offered by the Monetary Authority of Singapore (MAS), which can help financial institutions save on taxes.

View MAS' tax incentives and grant schemes for financial institutions with plans to establish or expand their operations in Singapore, to learn more about the benefits and eligibility criteria.

Consumer behavior in Singapore's banking sector is shaped by a mix of traditional and digital preferences. Banks customer satisfaction rating in Singapore as of the 4th quarter of 2022, was a key factor in consumer decision-making.

Consumers in Singapore have a strong affinity for digital banking, with a preference for digital versus traditional banks among consumers in Singapore in 2023. In fact, a significant number of consumers are willing to try digital banks in Singapore in 2022, by age group.

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Reasons for choosing digital banks among consumers in Singapore as of October 2022, reveal that convenience and ease of use are top priorities. Consumers are attracted to digital banks that offer seamless online experiences and 24/7 customer support.

Interestingly, willingness to try digital banks in Singapore in 2022, by age group, shows that younger consumers are more open to digital banking than their older counterparts. For instance, a higher percentage of Gen Z consumers are willing to try digital banks compared to Baby Boomers.

Here's a summary of the key findings on consumer behavior in Singapore's banking sector: