On 27 June 2023, the Monetary Authority of Singapore (“MAS“) issued a public consultation on the proposed change11s to increase deposit insurance (“DI“) from S$75,000 to S$100,000 per depositor per DI scheme member from 1 April 2024, and improve the clarity and operational efficiency of the DI scheme. The consultation closes on 31 July 2023.
By way of background, the DI scheme in Singapore was established in 2006 with the primary objective of protecting small depositors while maintaining the incentives for banks, creditors and depositors to exercise market discipline. The Singapore Deposit Insurance Corporation (“SDIC“) administers the DI scheme and has established systems and processes to provide expeditious compensation to insured depositors in the event of a DI payout. MAS, in consultation with SDIC, conducts regular reviews of the DI scheme to ensure that it continues to meet its objectives. The DI limit was last reviewed in 2019 when it was raised from S$50,000 to S$75,000, covering 91% of depositors at that time.
This consultation paper sets out the recommendations arising from MAS’ periodic reviews of the DI scheme. The proposed increase of DI coverage to S$100,000 will ensure that the vast majority of smaller depositors continue to be fully covered, keeping pace with the growth in average deposit balances. MAS is also proposing changes to improve clarity and enhance the operational efficacy of the DI scheme.
Click on the following links for more information (available on the MAS website at www.mas.gov.sg):
