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Source:
www.mas.gov.sg |
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MAS Invites Comments on
Proposed Exemption from Maximum Credit Card Limit |
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The Monetary Authority of Singapore (MAS)
has issued a consultation paper proposing to exempt card issuers from
complying with the maximum credit limit when issuing credit or charge
cards to individuals with an annual income of at least $120,000 or net
personal assets exceeding $2 million[1]. |
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With the proposed exemption, card issuers
may determine the appropriate credit limits for this higher income group
in line with their assessment of the credit worthiness of these
individuals. |
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This proposal is part of MAS' ongoing
process of updating the credit card rules to ensure that they remain
appropriate and relevant. |
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MAS recognises that the Government’s social
policy to protect individuals from spending beyond their means and
incurring unsustainable debt is best aimed at individuals that most need
this protection. |
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We consider that individuals with greater
financial means should not require the same level of protection. |
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In addition, the percentage of serious
defaults among cardholders in this income group is generally very low. |
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MAS expects card issuers to adhere to
stringent lending standards when issuing cards at a higher credit limit
to this higher income group. |
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Such standards should include adopting
rigorous credit evaluation criteria and robust credit risk management
systems to effectively monitor and manage the risks and defaults of this
group of cardholders. |
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MAS proposes to implement the above
exemption at the same time as the other proposed changes[2] to the
Banking (Credit Card and Charge Card) Regulations. |
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Interested parties should forward
their comments on the proposals in the consultation paper
(Click here to view) to MAS by 1st November 2007. |
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[1] To be applied on an on-going
basis. |
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[2] On 7 August 2006, MAS and the Ministry of
Law issued a joint consultation paper proposing certain changes to the
unsecured credit rules. Response to the consultation together with the
final proposals were issued on 1 February 2007. |
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Source:
www.mas.gov.sg Press Release 1
Oct 2007 |
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FrontPage Edition: Tue 9 October 2007
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