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The Monetary Authority of
Singapore (MAS) today (15 Apr 2004) announced two amendments to the Banking
(Credit Card and Charge Card) Regulations issued on 19 January 2004.
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This is in response to further
feedback from card issuers following the issuance of the Regulations in
January.
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The first amendment allows card
issuers to issue credit cards to individuals who do not meet the minimum
income requirement as long as they have deposits of more than S$10,000 and the
credit granted is fully secured against the deposits.
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Individuals, e.g. retirees, who do
not qualify for an unsecured credit card but have substantial savings, can now
obtain a secured credit or charge card. However, unsecured credit cards issued
to individuals will continue to be subject to the minimum annual income
requirement and the maximum credit limit of two months' income.
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This change does not compromise
the fundamental objective of discouraging Singaporeans from spending beyond
their means, as the credit granted must be secured against the cardholder's
deposits. The minimum deposit requirement of $10,000 will ensure that
only those who have substantial savings can obtain a secured credit card.
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The second amendment removes the
requirement for an issuer to perform income verification checks before issuing
additional card(s) to an existing cardholder. In such cases, no
additional credit is made available since the Regulations already require an
issuer to aggregate the credit limits under all cards issued to a cardholder,
and ensure that the total does not exceed two months income.
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There is no relaxation in the
availability of credit to individuals. The Government's long-standing
policy to discourage Singaporeans from spending beyond their means by curbing
the easy availability of consumer credit remains unchanged.
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The Banking (Credit Card and
Charge Card) (Amendment) Regulations 2004 come into force immediately and are
available on the MAS
website.
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Notes:
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1. An individual who meets
the minimum requirements for both unsecured and secured credit card facilities
will have the option of obtaining either an unsecured credit card facility of
up to two months' income, or a secured credit card facility of up to the
amount of deposits pledged to the issuer.
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2. Issuers are allowed to
issue supplementary secured cards as long as the aggregate credit limit
granted on the principal card and all its supplementary cards are secured on
the principal cardholder's deposits.
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Source: Monetary Authority of
Singapore (MAS) Press Release 15 Apr 2004
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MAS allows credit cards secured by bank deposits
