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Author: Ravi Philemon
SG Financial institutions (FIs) in Singapore will be allowed to reopen more customer service locations from 2 June 2020. This will be carried out with strict safe management requirements in place, to minimise the risk of COVID-19 infections, in line with the Ministry of Health (MOH)’s three-phased approach to resume business operations.
The Monetary Authority of Singapore (MAS) will allow Financial Institutions more onsite staff to meet increased customer needs as some businesses re-open, as well as to serve customers using both online and offline channels more efficiently.
Most SG Financial Institutions staff will continue to work from home as telecommuting remains the default for jobs that can be performed from home.
SG financial Institutions are required to implement strict safe management measures, including staggered start times and flexible work hours, to ensure that safe distancing can be maintained at work premises and in the public transport system.
Customer service locations of insurance companies, fund managers, and brokers will re-open to process essential customer transactions, such as facilitating account opening, updating account information, dealing with insurance policy enquiries, and processing claims and applications for relief measures. Money changing services will also resume.
Financial Institutions providing financial advice on banking, insurance and investment products, and private banks offering wealth management advice, will be permitted to have in-person meetings with their customers at their business premises only with MAS approval and subject to additional safe management measures.
MAS strongly advises all SG financial institutions customers to continue using digital financial services and e-payments as much as possible. Customers who need to visit an FI’s premises must adhere to the safe management measures at the FI’s premises.
SG financial Institutions are responsible for implementing all relevant safe management measures, including SafeEntry, prescribed by MOH, prior to the re-opening of customer service locations and resumption of workplace activities. MAS will continue to conduct onsite inspections to check that safe management requirements are implemented at FIs’ premises, especially at customer-facing locations. Actions will be taken against FIs that fail to comply with the required safe management requirements.
MAS will continue to work closely with the financial industry to safeguard the safety of their customers and staff while progressively expanding the range of financial services offered, and maintaining Singapore’s position as an international financial centre.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “the gradual opening up of more customer service locations of SG financial institutions will be useful for many people who are not internet savvy.”
“Also at this very difficult time, assistance schemes and quick loan access, especially to ramp up cash flow for SME relief measures are very important. The timely and broad-based help they get will determine if the companies die or emerge stronger after this crisis ends,” Mr Ho said.
He added, “I am happy that the Government remains steadfast in its commitment to standing by its customers and believes that their new round of liquidity relief measures will help alleviate some of the challenges individuals may face in managing their cash flows. Those that want to talk about SME loans, can also talk to loan consultants. Having long term and strategic relationship with various banks, loan consultants would be best placed to help SME owners the best.”
The Monetary Authority of Singapore (MAS) said in a press release on Feb 14 that it welcomes the recent announcements from banks and insurers in Singapore to support their customers who may be facing financial difficulties brought about by the impact of the ongoing 2019 novel coronavirus (COVID-19) outbreak.
The support announced by financial institutions thus far include moratoriums on repayments for affected corporate and individual customers, extension of payment terms for trade finance facilities, and additional financing for working capital.
MAS noted that the measures are in line with guidelines on corporate debt restructuring by the Association of Banks in Singapore (ABS). Insurers in Singapore have clarified that Integrated Shield Plans (IP), IP riders and most other personal and group health insurance policies will cover hospitalisation expenses related to COVID-19.
Some insurers have extended additional benefits to life insurance policyholders diagnosed with COVID-19, such as complimentary lump sum payments upon diagnosis, as well as daily cash payment for the duration of hospitalisation.
MAS said it supports these efforts by financial institutions to work constructively with customers affected by COVID-19 while adhering to prudent risk assessments. The various measures by financial institutions will help corporates and individuals facing short-term cash flow constraints and provide timely insurance coverage for policyholders affected by COVID-19. Taken together, these measures by financial institutions should help to buffer some of the impact on corporates and individuals from the COVID-19 outbreak, said MAS.
UOB one of the financial institutions, announced a $3billion relief assistance especially for SMEs affected by Covid-19. It said in a press release on Feb 12 that it has allocated S$3 billion to provide companies, especially small- and medium-sized enterprises (SMEs), in Singapore with relief assistance to tide over the negative impact of the COVID-19 outbreak on their business.
DBS on April 3rd announced that it will introduce a third round of liquidity relief measures to help individuals and SMEs impacted by the COVID-19 pandemic. These COVID-19 liquidity relief packages closely follow the guidelines as set out in the relief package for borrowers announced by the Monetary Authority of Singapore on 31 March 2020.
In early May and in responding to a parliamentary question on quick loan access to businesses struggling in the Covid-19 crisis, the Government said, the schemes they have rolled out are providing them access to credit and improve cash flows.
In response to the the question on quick loan access to provide relief measures for SMEs, the Government said:
“As SMEs are a vital part of our economy, the Monetary Authority of Singapore (MAS) and Enterprise Singapore (ESG) are working closely with the banking sector to ensure that SMEs continue to have access to the financial support they need to tide through this difficult period. This is done through the ESG loan schemes.
The loan schemes have seen strong interest. Based on ESG’s data, SME borrowers have applied for more than 2,500 loans amounting to about S$1.9 billion since the beginning of March this year. This is about six times the credit extended over the same period last year. The approval rate of these loan applications has been high, at 90% to 95%.
Under the ESG loan schemes, the Government takes 90% of the loss if a loan goes bad, with the banks assuming the remaining 10%. This has helped bring down the credit spread.
The ESG loan schemes were further enhanced when MAS launched a new Singapore Dollar facility for the banks and finance companies. It provides them with fully collateralised funding for two years at an interest rate of 0.1% per annum, for the purpose of their loans under the ESG schemes. This funding differs from the existing five-year, uncollateralised funding provided by the Government.
Together with the earlier enhancements to the ESG loan schemes, this is expected to bring down interest rates for such loans to 2-3% for most borrowers, compared to 6% or more for most other unsecured working capital loans to SMEs.
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