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Source:
www.mas.gov.sg |
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Question No. 329 Notice Paper No. 199 of 2007
For Oral Answer |
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For Parliament Sitting on 27 August 2007 |
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Name and Constituency of Member of
Parliament: Mr Michael Anthony Palmer, MP for Pasir Ris-Ponggol GRC |
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Question |
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Q329: To ask the Senior Minister
in light of the relaxation of minimum annual income for credit card
applicants and certain local banks launching or intending to launch
credit cards where no minimum annual income is required, what measures
will the Monetary Authority of Singapore implement to ensure that the
applicants of these credit cards, particularly those who have not even
started working, will not be burdened with insurmountable debts. |
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Mr Lim Hng Kiang, Minister for Trade &
Industry, Deputy Chairman, Monetary Authority of Singapore: |
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Mr Palmer asked about the relaxation in the
minimum annual income for credit card applicants, and about the launch
of payment instruments with a credit limit of not more than $500 without
a minimum income requirement. |
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First, let me clarify that the minimum
annual income requirement to qualify for a credit card has not been
relaxed, and remains at $30,000. |
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There are no plans to change this.
When Mr Palmer mentioned the relaxation in the minimum annual
income for credit cards, I presume he was referring directly to
payment instruments with a maximum credit limit of $500. |
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MAS has exempted payment instruments
with a credit limit of less than $500 from MAS' rules to provide
some leeway to the market to innovate and develop convenient
payment instruments. For example, there have been initiatives in
Europe to develop systems for processing payment for small-ticket
items using handphones. |
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Whether it is cards or other
instruments used for payment for goods or services, MAS has set
the maximum credit limit at $500. This allows flexibility in
payments for small-ticket items without raising substantial
concerns about Singaporeans spending beyond their means. |
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Mr Palmer expressed concern about
cards targeted at students aged 18 and above. I agree with his
view that card issuers should be responsible when targeting at
students. |
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We note that some industry practices
include requiring parental consent when issuing cards to
individuals aged below 21 years, suspending the card once there is
a missed payment as well as contributing customer credit data to
the credit bureau. |
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These practices, together with the
modest credit limit of $500, will help avoid situations where
young cardholders take on unsustainably high debt. |
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As more industry players offer $500
payment instruments, we would encourage the industry to come up
with a common Code of Conduct to bolster responsible lending
practices in this segment. |
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To help young Singaporeans acquire the
skills and knowledge to better manage their finances, we have been
working through MoneySENSE, the national financial education
programme, with schools to teach youths basic money management
skills. |
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Ultimately Singaporeans have to take
personal responsiblity for their finances, and ensure that they do
not incur excessive debt. |
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Source:
www.mas.gov.sg News Room 27
Aug 2007 |
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FrontPage Edition: Fri 31 August 2007
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