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Bank Licence Singapore

Updated: 6 days ago


Bank Licence Singapore | Bestar
Bank Licence Singapore | Bestar

Bank Licence Singapore


Types of Deposit-Taking Institutions


Deposit-taking institutions in Singapore comprise full banks, wholesale banks, merchant banks and finance companies. The Monetary Authority of Singapore (MAS) regulates these deposit-taking institutions, which play a vital role in Singapore's financial system.

Deposit-taking institutions in Singapore come in four main types:

  • Full Banks: These banks offer a wide range of financial services to both individuals and businesses. They can take deposits, provide loans, issue cheques, and offer other financial products like wealth management and insurance. Examples of full banks in Singapore include DBS Bank, OCBC Bank, and UOB.

  • Qualifying Full Banks: QFB licenses are specifically for foreign banks. QFBs can operate up to 25 locations, including a combination of branches and ATMs. They're allowed to share ATMs with other QFBs. QFBs have the flexibility to offer a broad range of services, including: Debit cards through the EFTPOS network, Supplementary Retirement Scheme (SRS) and Central Provident Fund (CPF) Investment Scheme accounts, and Fixed deposits under the CPF Investment Scheme and CPF Retirement Sum Scheme.

  • Wholesale Banks: Wholesale banks primarily deal with corporate and institutional clients. They provide services like trade finance, foreign exchange, and cash management. Unlike full banks, wholesale banks generally do not deal with individual consumers.

  • Merchant Banks: Merchant banks specialize in investment banking activities, such as underwriting securities, mergers and acquisitions (M&A), and project financing. They help businesses raise capital and advise them on financial matters.

  • Finance Companies: Finance companies provide loans and other financial products to specific sectors, such as consumer financing or property loans. They may also offer leasing and factoring services.


Full Banks


Here are the key points of Full Banks in Singapore:

  • Licensing and Regulation: They operate under the Banking Act and are overseen by the Monetary Authority of Singapore (MAS).

  • Universal Banking: Full banks can offer a wide range of financial services, including:

  • Deposit taking (savings accounts, current accounts etc.)

  • Cheque services and lending (personal loans, mortgages etc.)

  • Other MAS-authorized activities like financial advisory services, insurance broking, and capital market services.

  • Restrictions: Full banks cannot engage in non-financial activities as defined by Section 30 of the Banking Act.

  • Compliance: While separate licenses aren't required for additional services like financial advising or insurance broking, banks and their representatives must comply with regulations like the Financial Advisers Act (FAA), Insurance Act (IA), and Securities and Futures Act (SFA).

  • Regulations: For further details, you can refer to MAS regulations for "Full Bank (Locally Incorporated)" and "Full Bank (Branch)".


This information provides a good understanding of the scope of operations and regulations surrounding Full Banks in Singapore.


Qualifying Full Banks


Qualifying Full Banks (QFBs) are a specific type of Full Bank license in Singapore issued to foreign banks.  Here's how they differ from regular Full Banks:

  • License: They hold a Qualifying Full Bank (QFB) license, while regular Full Banks can be local or foreign.

  • Branch Network: QFBs are allowed to operate a higher number of service locations compared to regular foreign Full Banks. The limit is 25 locations, which can be a combination of physical branches and off-site ATMs. Regular foreign Full Banks typically have stricter limitations on branches.

  • ATM Sharing: QFBs can share ATMs with other QFBs, offering more convenience to their customers.

  • Additional Services:  They are authorized to offer a wider range of services compared to regular foreign Full Banks. This includes:

    • Providing debit services through an EFTPOS network.

    • Offering Supplementary Retirement Scheme (SRS) and Central Provident Fund (CPF) Investment Scheme accounts.

    • Accepting fixed deposits under the CPF Investment Scheme and CPF Retirement Sum Scheme.


Wholesale Banks


That's a great breakdown of Wholesale Banks in Singapore! Here are the key takeaways:

  • Licensing and Regulation: Similar to Full Banks, Wholesale Banks are licensed and governed by the Banking Act.

  • Similar Business Scope (except Retail): They can offer a wide range of banking services like Full Banks, but with a crucial difference - they cannot conduct Singapore dollar retail banking activities. This means they can't offer services like savings accounts, current accounts, or personal loans in Singapore dollars to individual consumers.

  • Non-Financial Activities Restricted: Just like Full Banks, they are prohibited from engaging in non-financial activities as defined by the Banking Act.

  • Specific Guidelines: Wholesale Banks operate under the "Guidelines for Operations of Wholesale Banks" set by the Monetary Authority of Singapore (MAS).

  • Regulations for Different Types:  For further details on specific requirements, you can refer to MAS regulations for "Wholesale Bank (Locally Incorporated)" and "Wholesale Bank (Branch)" depending on the bank's structure.


This information clarifies the focus of Wholesale Banks, catering primarily to corporate and institutional clients with services denominated in foreign currencies or other financial instruments.


Merchant Banks


Merchant Banks in Singapore operate under a specific framework. Here's what we know:


  • Licensing and Regulation: Similar to Full Banks and Wholesale Banks, they are licensed and governed by the Banking Act.

  • Permissible Activities Defined: Section 55V of the Banking Act outlines the specific activities Merchant Banks are authorized to conduct. This section likely details their focus on investment banking activities, unlike the broader scope of Full Banks.

  • Regulations for Different Types:  Depending on whether the Merchant Bank is locally incorporated or operates as a branch, you can find more details on specific requirements in MAS regulations for "Merchant Bank (Locally Incorporated)" and "Merchant Bank (Branch)".


Some general areas Merchant Banks might specialize in:


  • Underwriting Securities: Raising capital for companies by issuing stocks or bonds.

  • Mergers and Acquisitions (M&A): Advising companies on mergers, acquisitions, and divestitures.

  • Project Financing: Providing loans for large-scale projects.

  • Financial Advisory Services: Offering financial advice to companies on various matters.


If you'd like to learn more about the specific activities permitted to Merchant Banks, check the Monetary Authority of Singapore's website (MAS) for the full text of Section 55V of the Banking Act.


Finance Companies


Finance companies are another key type of deposit-taking institution in Singapore, but with a distinct focus compared to Full Banks or Wholesale Banks. Here's a breakdown:

  • Licensing and Regulation: They operate under a different regulatory framework - the Finance Companies Act, separate from the Banking Act.

  • Deposit Taking: Similar to Full Banks, finance companies can take deposits from the public.

  • Lending Focus: Their primary activity is lending to individuals and corporations, including small and medium enterprises (SMEs). This caters to a different market segment compared to Full Banks, which might offer a wider range of loan products.


For a deeper dive into the regulations governing finance companies, you can refer to the dedicated section on "finance company regulations" provided by the Monetary Authority of Singapore (MAS). This section details specific requirements regarding capital adequacy, risk management, and consumer protection for finance companies.


Monetary Authority of Singapore Licensing


To operate a bank in Singapore, you'll need a license from the Monetary Authority of Singapore (MAS), the country's central bank. The Monetary Authority of Singapore (MAS) is responsible for licensing and authorizing institutions to conduct banking business in Singapore.


There are two main types of bank licenses in Singapore:


  • Wholesale Bank (WB) Licence: This license allows you to conduct a wide range of banking activities, except for Singapore Dollar retail banking. This means you can deal with corporations and other institutional clients, but not directly with individual consumers for their everyday banking needs.

  • Merchant Bank Licence: This license is similar to a Wholesale Bank license, but with a focus on investment banking activities like underwriting securities and mergers & acquisitions advisory.


Types of Banking Licenses: MAS grants licenses for various banking institutions, including:


  • Full Banks

  • Wholesale Banks

  • Merchant Banks

  • Finance Companies


Licensing Requirements for Bank Licenses


Institutions need to meet MAS's admission criteria. Overview of the admission criteria that the Monetary Authority of Singapore (MAS) considers when evaluating applications for Wholesale Bank or Merchant Bank licenses:


  • Financial soundness, track record, world ranking and reputation of the FI, parent company and major shareholders.

  • Strength of home country supervision, including the willingness and ability of the home supervisory authority to cooperate with MAS, and its framework for cross-border cooperation.

  • Written consent from the home country supervisory authority for the establishment of a banking operation in Singapore.

  • Well-thought strategy for banking and financial services in Singapore, and sound business plans to ensure sustained economic viability.

  • Robust risk management systems and processes that are commensurate with the FI's size and proposed business


Here's a breakdown of the key factors:

Financial Strength and Reputation:


  • Financial Institution (FI): MAS will assess your FI's overall financial health, including capital adequacy, profitability, and risk management practices.

  • Parent Company and Shareholders: The financial health and reputation of your parent company and major shareholders will also be scrutinized.


Home Country Regulatory Environment:


  • Strength of Supervision: MAS will evaluate the effectiveness of your home country's banking regulations and supervisory body.

  • Cooperation and Cross-Border Framework: The willingness of your home country's authorities to cooperate with MAS and the existence of a framework for smooth cross-border collaboration are crucial.

  • Written Consent:  You'll need written approval from your home country's regulatory body for establishing a banking operation in Singapore.


Business Strategy and Viability:


  • Clear Strategy: A well-defined and realistic plan for your banking or financial services operations in Singapore is essential.

  • Sound Business Plans: Detailed business plans outlining your proposed activities, target markets, and strategies for achieving sustained economic viability are required.


Risk Management:


  • Robust Systems: You must demonstrate that your risk management systems and processes are robust and can effectively manage the risks associated with your proposed business scale and activities.


Meeting these criteria demonstrates to MAS that your FI is a responsible and well-managed entity, capable of contributing positively to Singapore's financial system.  If you're considering applying for a Wholesale Bank or Merchant Bank license, carefully evaluate your FI's standing against these admission criteria.  This will help you assess your application's competitiveness and identify areas for improvement before submission.


Application Process for Bank Licenses


Here's a breakdown of the key steps for applying for a Wholesale Bank or Merchant Bank license in Singapore:


  • Required Information: When completing the application, be prepared to provide comprehensive information about your financial institution (FI), including: Refer to the application form for detailed instructions:

  • Background information.

  • Financial indicators of the FI on a global basis and credit ratings.

  • Overview of the FI's strategies in Singapore.

  • Detailed plans for each major business area of the Singapore office.

  • Information on the FI's home country banking system.

  • Documents required.


Remember, this information provides a general overview. The application form itself will have specific instructions and may require additional documents. It's recommended to carefully review the form and seek professional guidance if needed to ensure a complete and compliant application.

Pre-application Consultation with MAS


The Monetary Authority of Singapore (MAS) strongly encourages potential applicants to reach out to their Banking Department before submitting a formal application. This proactive approach offers several benefits:


  • Early Identification of Issues: By discussing your plans with MAS, you can identify any potential roadblocks or areas that might not comply with licensing requirements. This can save you time and resources by addressing these concerns before submitting a formal application.

  • Understanding Permitted Activities:  For Wholesale Banks and Merchant Banks,  MAS recommends reviewing the information on "types of deposit-taking institutions". This will clarify the specific activities each license type permits.

  • Contact Information: The email address provided (bd_registry@mas.gov.sg) allows you to contact the MAS Banking Department directly to make an appointment or inquire further about the licensing process.


By taking advantage of this pre-application consultation, you can increase your chances of a smooth and successful application process for your deposit-taking institution license in Singapore.


Remember, obtaining a bank license in Singapore is a complex process with stringent requirements. Consulting with a professional experienced in financial regulations is recommended.


Processing Time


The Monetary Authority of Singapore (MAS) aims to process all deposit-taking institution license applications promptly. Here's a breakdown of the typical timeframe:


  • Standard Processing: In most cases, assuming a complete and clear application with all required information and fees submitted, MAS expects to review and process the application within 3 to 4 months.

  • Complex Applications:  For applications with greater complexity, involving new business models, technological challenges, or requiring additional information from the applicant, the processing time may be longer.

  • Incomplete Applications: Applications with missing information or errors will likely take longer as MAS will need time to request clarifications or additional documents.


It's important to note that the processing time is just an estimate and can vary depending on the specific circumstances of each application.  If you're considering applying for a deposit-taking institution license in Singapore, it's crucial to ensure your application is comprehensive, well-prepared, and meets all MAS requirements to minimize processing delays.


Application Fee


The application fee for a deposit-taking institution license in Singapore is S$20,000 and it's non-refundable.  


Here are some resources for further information:



How Bestar SG can Help

Bank Licence Singapore


Financial licensing and regulations are complex, and it's advisable to consult a professional with expertise in Singaporean banking regulations.


Some general insights on how Bestar SG can assist with obtaining a bank license in Singapore:


  • Understanding Licensing Requirements: Bestar SG might be able to help you navigate the complexities of MAS's licensing requirements and application process. We can advise on the specific criteria applicable to your desired license type (full bank, wholesale bank, etc.).

  • Preparing the Application: The application process for a banking license can be rigorous. Bestar SG has experience assisting clients in assembling the necessary documentation, financial statements, and business plans required by MAS.

  • Liaison with Regulators:  Having a professional familiar with MAS regulations can be helpful throughout the application process. Bestar SG might be able to mediate communication with regulators and ensure your application adheres to all guidelines.


Look for Bestar. We have experience in Singapore's financial regulatory landscape and expertise in banking licenses.






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