May 18, 1999
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| May 18, 1999 | atimes.com | |
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| Southeast Asia Singapore to issue six new banking licenses By Christopher Donville and Dharmo Soejanto Bloomberg News SINGAPORE - Singapore said it would liberalize its banking sector and award up to six new licenses to foreign banks in a bid to compete with rival financial centers in Asia. The moves, which were expected, include a plan to abolish a dual share system that has stymied tie-ups between Singapore banks and potential foreign partners. The city state gave no deadline for banks to merge their ''local'' and ''foreign'' classes of stocks. The two-track market - designed to prevent the takeover of Singapore banks by foreigners -- divides Singapore bank shares into those that can be owned by foreign investors and those that cannot. The new licenses will allow foreign banks to set up more branches and automated teller machines throughout the island state. They will also permit foreign banks to link their ATM networks. The Monetary Authority of Singapore also reiterated that the country could only ''sustain'' two local banks, compared with five major banks now. It also expects the local banks to keep 50 percent of domestic bank deposits under the new rules. The moves will expose banks like Development Bank of Singapore Ltd. to greater competition. They reflect the government's belief that local banks will only survive if they're exposed to foreign rivals. Singapore bank shares and their derivatives were suspended all day Monday for the announcement by Lee Hsien Loong, chairman of the MAS, the central bank. Earlier this month, Senior Minister Lee Kuan Yew - Lee Hsien Loong's father - warned in parliament that Singapore banks should no longer rely on government protection and that they risked being ''wiped out'' unless they expanded their products and embraced world-class talent. | |||||||||
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