Banking (Amendment) Bill

Bill No. 22/1993

Read the first time on 30th July 1993.
An Act to amend the Banking Act (Chapter 19 of the 1985 Revised Edition).
Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:
Short title and commencement
1.  This Act may be cited as the Banking (Amendment) Act 1993 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.
Amendment of section 2
2.  Section 2 of the Banking Act is amended by deleting subsection (3) and substituting the following subsection:
“(3)  For the purposes of sections 9, 10, 29, 31 and 33, “capital funds” means —
(a)in the case of a bank whose head office is situated in Singapore, the paid-up capital and published reserves of that bank deduction having been made in respect of any debit balance appearing in the profit and loss account of the bank; and
(b)in the case of a bank whose head office is situated outside Singapore, the net head office funds and such other liabilities as the Authority may decide.”.
Repeal and re-enactment of sections 9 and 10
3.  Sections 9 and 10 of the Banking Act are repealed and the following sections substituted therefor:
“Minimum capital requirements
9.—(1)  Subject to this Act, a bank shall not be granted or hold a licence unless —
(a)in the case of a bank incorporated in Singapore which holds a licence to carry on banking business on the appointed day, its capital funds are subject to this section not less than $800 million;
(b)in the case of a bank incorporated in Singapore which is granted a licence to carry on banking business after the appointed day, its issued and paid-up capital is not less than $800 million and its capital funds are not less than that amount;
(c)in the case of a bank whose head office is situated outside Singapore —
(i)its issued and paid-up capital is not less than the equivalent of $200 million, deduction having been made in respect of any debit balance appearing in the profit and loss account of the bank; and
(ii)it holds net head office funds of not less than $10 million in Singapore in respect of its business in Singapore at all times and not less than $5 million of those net head office funds are in the form of assets approved by the Authority.
(2)  Notwithstanding subsection (1)(a), the Authority may, at any time after 5 years from the appointed day, by order require the issued and paid-up capital of a bank to which that subsection applies to be not less than $800 million within such time as may be specified in that order.
(3)  A bank which has its head office outside Singapore and which holds a licence to carry on banking business in Singapore on the appointed day shall —
(a)be exempt from subsection (1)(c)(i); and
(b)be exempt from subsection (1)(c)(ii) for a period of 6 months from the appointed day or such further period as the Authority may, on application by such a bank, approve subject to such conditions as the Authority thinks fit:
Provided that the bank’s net head office funds shall not, at any time after the appointed day, be less than $3 million in the form of such assets as the Authority may approve.
(4)  A bank to which subsection (1)(a) applies which has capital funds of less than $800 million on the appointed day shall be exempt from the requirement of that provision for 5 years from the appointed day, except that the bank shall not during that period allow its capital funds to be less than its capital funds on that day.
(5)  A bank whose issued and paid-up capital is at least 75% owned by another bank incorporated in Singapore with capital funds of not less than $800 million on the appointed day may apply in writing to the Authority to extend the period of 5 years referred to in subsection (4); and the Authority may approve the application with or without conditions.
(6)  A bank incorporated in Singapore shall not reduce its paid-up capital during the currency of its licence without the approval of the Authority.
(7)  The Authority may restrict or suspend the operations of a bank which fails to comply with subsection (2), (4) or (6), as the case may be.
(8)  In this section and section 10, “appointed day” means the date of commencement of the Banking (Amendment) Act 1993.
Capital ratio
10.—(1)  The Authority may require banks to maintain capital funds in Singapore in proportion to their total assets or to every category of assets at such ratio or ratios as may from time to time be determined by the Authority by notice in writing.
(2)  A bank incorporated in Singapore shall not, at any time, have a capital adequacy ratio of less than 12%, or such other percentage as may be determined by the Authority from time to time, as calculated in accordance with such form, content and manner as may be determined by the Authority by notice in writing.
(3)  A bank incorporated in Singapore which on the appointed day is unable to comply with the capital adequacy ratio required by subsection (2) shall, within one year from that day, comply with such ratio but the bank’s capital adequacy ratio shall not at any time during that period be less than its capital adequacy ratio on the appointed day.
(4)  The Authority may suspend or restrict the operations of a bank which fails to comply with subsection (2) or (3) or any requirement of the Authority under subsection (1).”.
New section 11A
4.  The Banking Act is amended by inserting, immediately after section 11, the following section:
“Appeal to Minister
11A.  Any applicant who is aggrieved by the refusal of the Authority to grant a licence under section 7(3) or 11 may, within 30 days of the decision of the Authority, appeal in writing to the Minister whose decision shall be final and shall be given effect to by the Authority.”.
New sections 14A to 14C
5.  The Banking Act is amended by inserting, immediately after section 14, the following sections:
“Approval by Minister for merger of certain banks
14A.—(1)  Subject to this section and section 14B, on the joint application of a bank and one or more banks which are wholly-owned subsidiaries of that bank, the Minister may approve the merger of those banks and issue a certificate of approval.
(2)  The issue of a certificate of approval by the Minister under subsection (1) merges the banks that are parties to the merger agreement on which the application for the certificate of approval is based.
(3)  Where a certificate of approval is issued under subsection (1) merging the banks, the merger shall for all purposes be deemed to have occurred and to be effective on the date mentioned in subsection (4).
(4)  A certificate of approval issued under subsection (1) shall have no force or effect until a copy of the certificate and the merger agreement on which it is issued is lodged with the Registrar of Companies, and upon being so lodged the certificate shall take effect on and from the date of lodgment.
(5)  No application to the Minister for a certificate of approval merging two or more banks may be made under subsection (1) unless —
(a)the Authority has approved the merger under section 14;
(b)the merger is between a bank and one or more banks which are wholly-owned subsidiaries of that bank;
(c)the banks proposing to merge have entered into a merger agreement; and
(d)the application for the certificate of approval is made within two weeks from the date of execution of the merger agreement referred to in paragraph (c).
(6)  Where a certificate of approval is issued under subsection (1) merging the banks, those banks shall publish a notice of the approval of the merger at least once in a local Malay, English, Chinese and Tamil language daily newspaper within one week from the date of the certificate of approval.
(7)  As from the date of approval of the merger by the Authority under section 14, section 47(3) shall not apply where the officials of any bank that is a party to the merger agreement referred to in subsection (5)(c) are required to give information which are necessary for the purposes of the merger.
(8)  For the avoidance of doubt, it is hereby declared that sections 210 and 212 of the Companies Act [Cap. 50] shall not apply to the banks which have jointly applied for a certificate of approval under subsection (1).
Condition for issue of certificate of approval
14B.—(1)  The Minister shall not issue a certificate of approval under section 14A unless the application thereof is supported by satisfactory evidence that the applicants have complied with the requirements of that section in relation to the merger.
(2)  Nothing in this Act shall be construed as precluding the Minister from refusing to issue or approve the issue of any certificate of approval under section 14A and any decision of the Minister under that section shall be final and shall not be called in question in any court.
Effect of merger
14C.  As from the date mentioned in section 14A(4), the provisions set out in the Fifth Schedule shall have effect and shall apply to the banks that are parties to the merger agreement on which a certificate of approval is issued under section 14A(1).”.
Amendment of section 25
6.  Section 25 of the Banking Act is amended —
(a)by deleting subsection (1) and substituting the following subsections:
“(1)  Every bank shall exhibit in a conspicuous position in each of its offices and branches in Singapore —
(a)a copy of its latest audited annual balance-sheet and profit and loss account, together with any notes thereon, and a copy of the report of the auditors, except that in the case of a bank incorporated outside Singapore, those statements may be made in a manner that complies with the law for the time being applicable in the place of its incorporation or origin;
(b)the full and correct names of all persons who are directors for the time being of the bank; and
(c)the names of all subsidiary companies for the time being of the bank.
(1A)  Every bank shall, within 6 months after the close of each financial year or within such period as the Authority may approve, publish in at least two local daily newspapers, one published in the English language and one published in either the Malay, Chinese or Tamil language, a copy of its latest audited annual balance-sheet and profit and loss account, containing at least such information as the Authority may require by notice in writing, except that in the case of a bank incorporated outside Singapore those statements may be made in a manner that complies with the law for the time being applicable in the place of its incorporation or origin.
(1B)  The Authority may by notice in writing require a bank to publish in addition to its balance-sheet and profit and loss account under subsection (1A) such additional information relating to the accounts of that bank for any financial year as the Authority thinks fit.”;
(b)by deleting the words “subsection (1)” in subsection (2) and substituting the words “subsections (1) and (1A)”; and
(c)by deleting subsection (5) and substituting the following subsection:
“(5)(a)In the case of a bank incorporated in Singapore —
(i)the annual balance-sheet and profit and loss account of the bank referred to in subsections (1) and (1A);
(ii)the balance-sheet and profit and loss account referred to in subsection (3); and
(iii)the half year interim profit and loss account of the bank,
shall be in such form as the Authority may approve.
(b)In the case of a bank incorporated outside Singapore, only the balance-sheet and profit and loss account referred to in subsection (3) shall be in such form as the Authority may approve.”.
Amendment of section 26
7.  Section 26 of the Banking Act is amended —
(a)by deleting the words “and the Chief Statistician” in the first and second lines of subsection (2);
(b)by deleting the words “, the Authority and the Chief Statistician” in subsection (5) and substituting the words “and the Authority”;
(c)by deleting the words “the Chief Statistician or” in subsection (6); and
(d)by deleting the words “or the Chief Statistician” in the second and third lines of subsection (7).
Amendment of section 27
8.  Section 27 of the Banking Act is amended by inserting, immediately after subsection (2), the following subsection:
“(3)  In this section, “director” includes the wife, husband, father, mother, son or daughter of a director.”.
Repeal and re-enactment of section 29
9.  Section 29 of the Banking Act is repealed and the following section substituted therefor:
“Credit facilities and limits
29.—(1)  Subject to subsection (3), a bank shall not —
(a)grant or permit to be outstanding to any one person or to any group of persons under the control or influence of any one person, any credit facilities if the aggregate amount of such credit facilities exceeds 25% of its capital funds or such other percentage not exceeding 100% of its capital funds as the Authority may approve;
(b)grant substantial loans which in the aggregate exceeds 50% of its total credit facilities or such other percentage as the Authority may determine;
(c)grant any credit facility against the security of its own shares;
(d)grant, whether directly or indirectly, unsecured credit facilities which in the aggregate and outstanding at any one time exceed the sum of $5,000 —
(i)to any of its directors, whether those credit facilities are obtained by its directors jointly or severally;
(ii)to a firm in which it or any of its directors has an interest as a partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor;
(iii)to a company in which any of its directors, whether legally or beneficially, owns more than 50% of the issued capital or in which any of its directors controls the composition of the board of directors, but excluding public companies the securities of which are listed on the Stock Exchange of Singapore or any other stock exchange which the Authority may approve, and the subsidiaries of such public companies; or
(iv)to any corporation, other than a bank, that is deemed to be related to the bank as described in section 6 of the Companies Act [Cap. 50]; or
(e)grant to any of its officers (other than a director) or its employees or other persons, being persons receiving remuneration from the bank (other than any persons receiving remuneration from a bank in respect of their professional services) unsecured credit facilities which in the aggregate and outstanding at any one time exceed one year’s emoluments of that officer or employee or person.
(2)  Subsection (1)(a) and (d)(iii) shall not apply to any credit facility granted before the date of commencement of the Banking (Amendment) Act 1993 by a bank which does not comply with those provisions for a period of two years from that date, but the bank shall not at any time during that period increase the amount of that credit facility.
(3)  Subsection (1)(a) and (b) shall not apply to —
(a)transactions with the Government;
(b)transactions between banks;
(c)the purchase of telegraphic transfers or loans or advances made against telegraphic transfers;
(d)any facilities granted against letters of credit or bills or guarantees or documents in respect of imports into or exports from Singapore; or
(e)any other type of transactions which the Authority may from time to time approve,
and subsection (1)(b) shall not apply to a bank whose total Singapore dollar credit facilities to its customers, excluding banks, do not exceed $100 million.
(4)  All the directors of a bank shall be liable jointly and severally to indemnify the bank against any loss arising from the making of any unsecured credit facility or any credit facility which subsequently becomes an unsecured credit facility under subsection (1)(d) whether the bank has contravened that provision or not.
(5)  In this section —
(a)“substantial loan” means any credit facility granted by a bank to a single person or to any group of persons under the control or influence of a single person which in the aggregate exceeds 15% of the bank’s capital funds;
(b)the reference to “director” in subsection (1)(d) includes the wife, husband, father, mother, son or daughter of a director;
(c)the composition of a company’s board of directors referred to in subsection (1)(d)(iii) shall be deemed to be controlled by a director of a bank if he by the exercise of some power exercisable by him without the consent or concurrence of any other person can appoint or remove all or a majority of the directors of that company; and
(d)“unsecured credit facilities” means credit facilities given without security, or in respect of any credit facility given with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the Authority is satisfied that there is no established market value, on the basis of a valuation approved by it.”.
Amendment of section 31
10.  Section 31 of the Banking Act is amended by deleting subsection (3).
Amendment of section 33
11.  Section 33 of the Banking Act is amended by deleting subsection (2).
Amendment of section 34
12.  Section 34 of the Banking Act is amended by deleting subsection (4).
Repeal of section 35
13.  Section 35 of the Banking Act is repealed.
Amendment of section 43
14.  Section 43 of the Banking Act is amended by deleting subsection (6).
Amendment of section 47
15.  Section 47 of the Banking Act is amended —
(a)by deleting the words “individual customer of any bank” in subsection (1) and substituting the words “customer of any bank other than to inquire into any credit facilities granted to the customer by a bank”;
(b)by inserting, immediately after the word “to” in the first line of subsection (2), the words “an inquiry relating to credit facilities under subsection (1) or”;
(c)by deleting the words “an individual” in the fifth line of subsection (2) and substituting the word “a”;
(d)by deleting the word “individual” in the fifth line of subsection (3);
(e)by deleting the words “civil proceedings arise —” in the first line of subsection (4)(c) and substituting the words “the disclosure of the information is with a view to the institution of, or for the purposes of, civil proceedings —”;
(f)by deleting paragraph (f) of subsection (4) and substituting the following paragraph:
“(f)the information relates to —
(i)credit facilities granted by a branch in Singapore of a bank incorporated outside Singapore; or
(ii)foreign exchange, money market or any other transactions between a branch in Singapore of a bank incorporated outside Singapore and other banks, whether in or outside Singapore, or such other financial institutions as may be determined by the Authority from time to time,
and the information is required by the head office of the branch;”;
(g)by deleting the full-stop at the end of paragraph (g) of subsection (4) and substituting a semi-colon, and by inserting immediately thereafter the following paragraphs:
“(h)the customer died, whether testate or intestate, and the information is required by his appointed personal representative or any person entitled to letters of administration solely in connection with an application for a grant of probate or letters of administration;
(i)the information relates solely to credit facilities granted by a branch of a bank incorporated outside Singapore and is required by the supervisory authority which is responsible for regulating the head office of the bank for the purpose of supervision of the bank by the supervisory authority, but this exemption shall only apply if the supervisory authority is prohibited by its domestic law from divulging the information received to third parties or gives an undertaking to the Authority not to divulge the information received to third parties;
(j)a customer who had been issued with a credit or charge card by a bank has his card suspended or cancelled by the bank by reason of his default in payment and the bank discloses information relating to the customer’s name and identity, the amount of his indebtedness and the date of suspension or cancellation of his credit or charge card to other banks and financial institutions issuing credit or charge cards in Singapore; or
(k)the information relates solely to credit facilities granted by a bank incorporated in Singapore and the information is required by another bank incorporated in Singapore which holds more than half the issued and paid-up capital of the first-mentioned bank.”;
(h)by inserting, immediately after subsection (5), the following subsection:
“(5A)  A bank or financial institution, or any of its officers or employees, receiving any information pursuant to subsection (4)(j) shall not disclose such information to any other person.”; and
(i)by inserting, immediately after subsection (6), the following subsections:
“(6A)  The Authority may provide information on the operations of a branch in Singapore of a bank incorporated outside Singapore (including any report produced by the Authority pursuant to any inspection or investigation of the bank) to the supervisory authority which is responsible for regulating the head office of the bank for the purpose of supervision of the bank by the supervisory authority, except that no information regarding the money or other relevant particulars of the accounts of a customer of the branch in Singapore shall be divulged by the Authority.
(6B)  The Authority may provide information to a supervisory authority under subsection (6A) if and only if the supervisory authority is prohibited by its domestic law from divulging the information received to third parties or gives an undertaking to the Authority not to divulge the information received to third parties.”.
New sections 47A and 47B
16.  The Banking Act is amended by inserting, immediately after section 47, the following sections:
“Production orders against banks to produce material relating to drug trafficking
47A.—(1)  Notwithstanding anything contained in section 47, the Attorney-General or any person duly authorised by him in writing may, for the purpose of an investigation into drug trafficking, apply to the High Court for an order under subsection (2) in relation to any particular material or material of a particular description.
(2)  The High Court may, if on such an application it is satisfied that the conditions referred to in subsection (3) are fulfilled, make an order that the bank which appears to the Court to be in possession of the material to which the application relates shall —
(a)produce the material to the Attorney-General or the person duly authorised by him for the Attorney-General or such person to take away; or
(b)give the Attorney-General or the person duly authorised by him access to the material,
within a reasonable period, but not less than 7 days, as the order may specify.
(3)  The conditions referred to in subsection (2) are —
(a)
(i)where the application is in respect of a foreign offence, that there is a prima facie case that a specified person has carried on or has benefited from drug trafficking; and
(ii)in any other case, that there are reasonable grounds for suspecting that a specified person has carried on or has benefited from drug trafficking;
(b)that there are reasonable grounds for believing that the material to which the application relates —
(i)is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the application is made; and
(ii)does not consist of or include items subject to legal privilege; and
(c)that it is not contrary to the public interest to produce the material to which the application relates.
(4)  No action shall lie against a bank which in good faith produces materials or gives access to materials relating to the account of its customer by reason of that bank having made the production or given access in compliance with an order made against it under subsection (2) or any act done or omitted to be done in relation to the funds, investment or property in the account of that customer in consequence of the production of or access to those materials.
(5)  The proceedings for an application of a production order under this section shall be heard in camera.
(6)  In this section —
“drug trafficking” has the same meaning as in the Drug Trafficking (Confiscation of Benefits) Act [Cap. 84A];
“foreign offence” has the same meaning as in the Drug Trafficking (Confiscation of Benefits) Act;
“items subject to legal privilege” has the same meaning as in section 33(2) of the Drug Trafficking (Confiscation of Benefits) Act.
Production orders to obtain information to assist foreign authority investigating
47B.—(1)  The Attorney-General or any person duly authorised by him in writing may make an application under section 47A for the purpose of assisting a foreign authority in its investigation into a foreign offence if and only if the conditions in subsection (2) are fulfilled in addition to those in section 47A(3).
(2)  The conditions referred to in subsection (1) are —
(a)there exists a mutual legal assistance treaty, memorandum of understanding or other agreement or arrangement in drug-related matters between Singapore and the foreign government and the conditions therein have been fulfilled in respect of any particular request for assistance from the Attorney-General, which conditions shall be in addition to and not in derogation of the conditions in this subsection;
(b)the foreign authority has agreed to provide reciprocal assistance in drugrelated matters to Singapore;
(c)the foreign offence which is the subject of the investigation constitutes an offence against the law of or of a part of the State of the foreign authority and the act or omission constituting the offence or the equivalent act or omission would, if it had occurred in Singapore, have constituted an offence under the Drug Trafficking (Confiscation of Benefits) Act [Cap. 84A] or the Misuse of Drugs Act [Cap. 185];
(d)the seriousness of the foreign offence under investigation is of sufficient gravity and the material which is the subject of the application is of sufficient importance to the investigation and whether the material could not reasonably be obtained by other means;
(e)the assistance is not likely to prejudice the sovereignty, security or other essential interests of Singapore;
(f)it is appropriate in the public interest to give the assistance sought;
(g)the foreign authority undertakes that the material sought if granted by the High Court pursuant to a production order shall not be used for any other purpose except for the investigation of the foreign offence or for the prosecution of the offender concerned and the material shall be returned to the Attorney-General upon completion of the investigation or the proceedings against the offender; and
(h)such other conditions as the Minister may prescribe.
(3)  The proceedings for an application for a production order under subsection (1) shall be heard in camera.
(4)  In this section —
“drug-related matters” includes the subject of mutual assistance in the investigation of drug trafficking offences within the meaning of the Drug Trafficking (Confiscation of Benefits) Act [Cap. 84A];
“foreign authority” means a foreign government or an appropriate authority designated by a foreign government exercising any function corresponding to a function of the Minister in charge of the Drug Trafficking (Confiscation of Benefits) Act or the Misuse of Drugs Act [Cap. 185];
“foreign country” means any country or territory outside Singapore;
“foreign government” means the government of a foreign country;
“foreign offence” has the same meaning as in the Drug Trafficking (Confiscation of Benefits) Act.”.
New section 54A
17.  The Banking Act is amended by inserting, immediately after section 54, the following section:
“Notices to banks
54A.—(1)  The Authority may, if it appears to the Authority to be necessary or expedient in the public interest or the interest of the banking system, by notice in writing to banks give directions or impose requirements on or relating to the operations and activities of and standards to be maintained by banks.
(2)  Without prejudice to the generality of subsection (1), any notice under that subsection may be given in respect of —
(a)the revaluation of the assets of banks;
(b)the maintenance of credit files of borrowers and the grading of loans;
(c)the prohibition or control of the sale of commemorative coins or medals;
(d)the deposit of specified securities with authorised depositaries;
(e)the issue of Singapore dollar negotiable certificates of deposit;
(f)prior notification to the Authority of changes in interest rates and minimum lending rates of banks;
(g)restrictions on the granting of Singapore dollar credit facilities in whatever form or by whatever means to residents of Singapore where such facilities are to be used outside Singapore, or to non-residents;
(h)the appointment of directors, chief and deputy chief executive officers and chief dealers of a bank;
(i)the maintenance of a register of dealers of a bank;
(j)the terms and conditions for the operation of a bank’s current and other accounts with the Authority;
(k)the manner in which a bank conducts its dealings with its customers, the procedures for the reporting of transactions between a bank and its employees, and conflicts of interest involving a bank and its employees or involving a bank and its customers;
(l)the maximum aggregate permissible percentage holdings by any class, category or description of persons of interests in shares of a bank incorporated in Singapore;
(m)the limits for the total amount of foreign exchange transactions which a bank incorporated in Singapore may undertake and for this purpose the limits may be applied uniformly to all such banks or separate limits may be determined for any particular bank incorporated in Singapore or for two or more of such banks;
(n)the opening of new branches of a bank and the change of location of any place of business of a bank;
(o)the installation of automated teller machines by a bank;
(p)the provision for and the writing-off of bad debts;
(q)any audit of a Singapore branch of a bank by an internal auditor from its head office which is outside Singapore;
(r)the forms, returns and submissions of statistics for the purposes of this Act.
(3)  Every bank shall comply with any direction given or requirement imposed by any notice under this section.
(4)  Every notice in writing issued by the Authority before the date of commencement of the Banking (Amendment) Act 1993 (other than a notice which was issued pursuant to another provision of this Act) shall, if such notice could have been issued under this section, be deemed to be so issued on that date.”.
Repeal and re-enactment of section 59
18.  Section 59 of the Banking Act is repealed and the following section substituted therefor:
“Clearing House settlements and control over Clearing House
59.—(1)  In order to facilitate the clearing of cheques and other credit instruments for banks, the Post Office Savings Bank of Singapore established under the Post Office Savings Bank of Singapore Act [Cap. 237], and other financial institutions approved by the Authority, the Authority shall, in conjunction with such banks and institutions, by regulations, establish a Clearing House.
(2)  The Authority may, from time to time, inspect under conditions of secrecy the operations, books, accounts and transactions of a Clearing House.
(3)  Where the Authority is of the opinion that a Clearing House is carrying on its operations in a manner likely to be detrimental to the interest of banks, the Post Office Savings Bank of Singapore or other participating financial institutions, the Authority may —
(a)require the Clearing House forthwith to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary;
(b)appoint a person to advise the Clearing House on the proper conduct of its business; or
(c)assume control of and carry on the business of the Clearing House or direct some other person to assume control of and carry on the business of the Clearing House.
(4)  The Authority may at any time fix the remuneration and expenses to be paid by the operator of the Clearing House to any person appointed by the Authority under subsection (3)(b) or (c), whether or not the appointment of such person has terminated.
(5)  Where the Authority has taken action pursuant to subsection (3), it may, at any time, vary or reverse any requirement, appointment or direction made by it.”.
Amendment of section 76
19.  Section 76 of the Banking Act is amended by deleting the word “This” in the first line and substituting the words “Unless otherwise expressly provided, this”.
New section 77A
20.  The Banking Act is amended by inserting, immediately after section 77, the following section:
“Authority to approve issue of stored value cards
77A.—(1)  No person shall issue any stored value card except —
(a)a bank which has obtained the approval of the Authority; or
(b)a person for payment only of goods or services or both goods and services provided by that person.
(2)  The proceeds arising from every issue by a bank of a stored value card may be subject to such reserve and liquidity requirements as the Authority may by notice in writing determine; and the Authority may for any failure to comply with such requirements impose a penalty interest charge of $100 per day or such larger amount as the Authority may determine.
(3)  The Authority may determine the terms and conditions under which a stored value card may be issued by a bank and that bank shall comply with such terms and conditions.
(4)  The use of a stored value card to operate a machine provided by the issuer or by some other person under an agreement with the issuer shall be regarded as the production of the stored value card to the issuer.
(5)  The Authority may exempt from subsection (1) for such period and subject to such terms and conditions as the Authority thinks fit any person who has, before the commencement of the Banking (Amendment) Act 1993, issued stored value cards.
(6)  Section 14 of the Currency Act [Cap. 69] shall not apply to a stored value card issued by a bank in accordance with this section.
(7)  Any person who contravenes this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.
(8)  In this section —
“bank” includes the Post Office Savings Bank of Singapore established under the Post Office Savings Bank of Singapore Act [Cap. 237];
“stored value card” means a card for which a person pays in advance a sum of money to the issuer in exchange for an undertaking by the issuer that on the production of the card to the issuer or a third party (whether or not some other action is also required), the issuer or the third party, as the case may be, will supply goods or services or both goods and services; and, for the purposes of this definition, “card” includes any token, coupon, stamp, form, booklet or other document or thing.”.
Repeal and re-enactment of section 78
21.  Section 78 of the Banking Act is repealed and the following section substituted therefor:
“Regulations
78.—(1)  The Authority may, from time to time, make such regulations as may be necessary or expedient for carrying out the purposes and provisions of this Act and for prescribing anything that may be required or authorised to be prescribed by this Act.
(2)  Without prejudice to the generality of subsection (1), regulations may be made for or with respect to the operations and activities of banks and other financial institutions issuing credit and charge cards, including the minimum qualifying criteria for the issue of a credit or charge card.
(3)  Regulations made under this section may relate to all, or any class, category or description of persons or banks, and may make different provisions for different classes, categories or descriptions of persons or banks or to a particular person or bank or of general or specifically limited application.
(4)  Except as otherwise expressly provided in this Act, the regulations may provide for the imposition of a fine not exceeding $5,000 or imprisonment for a term not exceeding one year or both for any contravention thereof.”.
New Fifth Schedule
22.  The Banking Act is amended by inserting, immediately after the Fourth Schedule, the following Schedule:
“FIFTH SCHEDULE
Section 14C
Effect of Merger
Interpretation
1.  In this Schedule, unless the subject or context otherwise requires —
“Bank” means the bank into which the other banks that are parties to a merger agreement are merged and to which a certificate of approval is issued under section 14A(1);
“customer” means any person having a banking account or any other account or other dealing, transaction or arrangement with any existing bank or the Bank, as the case may be;
“effective date” means the date mentioned in section 14A(4);
“existing banks” means the banks that are parties to a merger agreement other than the Bank, and “existing bank” shall be construed accordingly;
“liabilities” includes duties and obligations of every description (whether present or future, actual or contingent);
“property” means property and assets and rights of every description (whether present or future, actual or contingent) wheresoever situate and includes property held on trust and securities, rights, benefits and powers of every description but does not include any document required to be kept by an existing bank under the Companies Act [Cap. 50];
“security” means a mortgage or charge (whether legal or equitable), debenture, bill of exchange, promissory note, guarantee, lien, pledge, hypothecation, assignment by way of security, indemnity, right of set-off, undertaking or other means of securing the payment of a debt, whether present or future, or the discharge of an obligation or liability, whether actual or contingent;
“undertaking of an existing bank” means the business and all of the property vested in or belonging to or held by that existing bank immediately before the effective date and all of the liabilities to which that existing bank was subject immediately before that date.
Transfer of undertakings
2.—(1)  On the effective date, the undertakings of the existing banks shall, by virtue of section 14C and this Schedule and without further assurance, be transferred to and vest in the Bank as if in all respects the Bank were the same person in law as the existing banks.
(2)  The production of a copy of the certificate of approval issued under section 14A(1) shall, on and after the effective date, be conclusive evidence in all courts and proceedings of the transfer of the undertakings of the existing banks to the Bank and of their vesting in the Bank.
(3)  If any portion of the undertaking of an existing bank cannot be vested in the Bank by virtue of section 14C and this Schedule because transfers of that portion are governed otherwise than by the law of Singapore then that existing bank shall, as soon as is practicable after the effective date, take all necessary steps for the purpose of securing that that portion is effectively transferred to the Bank.
Saving of contracts, etc.
3.—(1)  Subject to this paragraph, all contracts, agreements, conveyances, covenants, settlements, trusts, deeds, leases, licences and other instruments or undertakings entered into by or made with or addressed to an existing bank or to which an existing bank is a party (whether alone or with any other person) before and in force on the effective date shall as from that date be binding and of full force and effect in every respect against or in favour of the Bank as fully and effectually as if, instead of an existing bank, the Bank had been a party thereto or bound thereby or entitled to the benefit thereof.
(2)  In relation to every contract of employment to which sub-paragraph (1) applies, that sub-paragraph shall operate to substitute the Bank for the existing bank which was the employer thereunder immediately before the effective date.
Banking business
4.  Without prejudice to the generality of paragraphs 2 and 3, the following provisions shall have effect in relation to the banking businesses of the existing banks:
(a)any account between an existing bank and a customer at any office or branch of that existing bank shall be transferred to the Bank on the effective date and shall become as and from that date an account between the Bank and the customer with the same rights and subject to the same obligations and incidents (including rights of set-off) as would have been applicable thereto if the account between that existing bank and the customer had continued and so that any instruction, order, direction, mandate or authority given by the customer in relation to the account and subsisting at or given after the effective date shall, unless and until revoked or cancelled, apply and have effect in relation to the account after its transfer to the Bank, except that nothing in this sub-paragraph shall affect any right of the Bank or of the customer to vary the conditions or incidents subject to which any account is kept;
(b)any security held by an existing bank as security for the payment of debts or liabilities (whether present or future, actual or contingent) of any person shall be transferred or deemed to be transferred to the Bank on the effective date and shall be held by and be available to the Bank as security for the payment of such debts and liabilities to the Bank; and where the moneys secured by such a security include future advances to or liabilities of that person, the security shall as from that date be held by and be available to the Bank as security for future advances to that person by, and future liabilities of that person to, the Bank to the same extent to which future advances by, or liabilities to, the existing bank were secured thereby immediately before that date;
(c)the Bank shall, in relation to any security transferred or deemed to have been transferred to it in accordance with or by virtue of the provisions of this Schedule and the moneys thereby secured in accordance with those provisions, be entitled to the same rights and priorities and subject to the same obligations and incidents as the existing bank from which the same has been transferred or deemed to have been transferred would have been entitled and subject to if the same had continued to be held by the existing bank; and
(d)the custody of any document, goods or other property held by an existing bank as bailee for any other person at any office or branch of that existing bank shall be transferred or deemed to be transferred to the Bank on the effective date and the rights and obligations of that existing bank under any contract of bailment relating to such document, goods or property shall be transferred or deemed to be transferred on that date to the Bank.
Actions, etc., not to abate
5.  Any action, arbitration or proceeding and any cause of action, arbitration or proceeding which shall, on the effective date, be pending or existing by, against or in favour of an existing bank shall not abate or be discontinued or be in any way prejudicially affected by reason of the provisions of this Schedule, but the same may be prosecuted, continued and enforced by, against or in favour of the Bank as and when it might have been prosecuted, continued and enforced by, against or in favour of an existing bank if this Schedule had not been enacted.
Documents, etc., to remain evidence
6.  All documents, records and admissions which if this Schedule had not been enacted would have been evidence in respect of any matter for or against an existing bank shall, on and after the effective date, be admitted in evidence in respect of the same or the like matter for or against the Bank.
Application of Part IV of Evidence Act
7.—(1)  Notwithstanding the transfer of the undertakings of the existing banks to the Bank under and in the terms of this Schedule, the provisions of Part IV of the Evidence Act [Cap. 97] shall continue to apply with respect to the books of the existing banks which are transferred to the Bank by virtue of this Schedule and to entries made in such books before the effective date.
(2)  For the purposes of this paragraph, “books” includes ledgers, day books, cash books, account books and all other books and records used in the ordinary business of an existing bank before the effective date.
Application of documents
8.—(1)  Subject to sub-paragraph (2), where any document whensoever made or executed contains any reference express or implied to an existing bank, such reference shall, on and after the effective date and except where the context otherwise requires, be read, construed and have effect as a reference to the Bank.
(2)  Without prejudice to the generality of sub-paragraph (1), where by any order of the court or by any trust deed, settlement, covenant or agreement or where by any will, codicil or other testamentary writing, whether made or executed before or after the effective date, an existing bank (whether alone or with any other person) was or is granted letters of administration or appointed trustee, executor, guardian or in any other fiduciary capacity, such order, trust deed, settlement, covenant, agreement, will, codicil or other testamentary writing shall not fail by reason of anything in this Schedule but shall, as from the effective date, be read and construed and have effect as if for any reference therein to that existing bank there was substituted a reference to the Bank.
Dissolution of existing banks
9.—(1)  An existing bank shall, by virtue of this Schedule, be dissolved on the day (being a day after the effective date) on which at the request of the Bank, the Registrar of Companies strikes the name of that existing bank off the register under section 344 of the Companies Act [Cap. 50].
(2)  On the day referred to in sub-paragraph (1), all documents required to be kept by the existing bank pursuant to the provisions of the Companies Act [Cap. 50] shall, by virtue of this Schedule, be transferred to and vest in the Bank.”.
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Last updated 21 Nov 2024
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