Banks in Singapore Key Terms

Understand types of banks in Singapore and important banking concepts
By Laurie Edwards Banks in Singapore are governed by the Banking Act set up by the Monetary Authority of Singapore (MAS). When the government changed the banking rules in 2001, it made it easier for foreign banks to establish branches in Singapore. Since then, many local banks have closed because they are often unable to compete with the foreign banks. Investors interested in opening accounts in Singapore banks need to become familiar with the important banking organizations, types of services offered by each classification of bank and key currency terms.

Commercial banks

In addition to the usual practices of lending money, taking deposits and providing checks, commercial banks in Singapore offer other services. These include supplying insurance coverage, financial advice and capital market services.
Try:  The book Advanced Study In Money & Banking describes and defines the various types of commercial banks.

Wholesale and full banks

Wholesale banks deal mainly with businesses, but have many restrictions on operating with individuals. Full banks serve both retail and corporate clients. Although both local and foreign banks can obtain these full banking licenses, foreign banks do not have the same privileges as Singapore-based banks. To open additional locations and more ATMs, foreign banks must apply for QFB (Qualifying Full Bank) licenses.
Try:  Find out more about wholesale, full and qualifying full banks from The Association of Banks in Singapore.

Merchant banks

Not considered commercial banks, merchant banks follow the Merchant bank directives. These directives govern corporate finance activities, such as handling mergers and acquisitions, managing portfolios, underwriting shares and bonds and engaging in other activities for which clients pay fees.
Try:  The Monetary Authority of Singapore supplies a list of the guidelines merchant banks must follow.

ASEAN Bankers' Association

The ASEAN Bankers' Association (ABA) is part of the Association of Southeast Asian Nations (ASEAN) formed in 1967. In addition to its goal of improving the economies of its 10 country members, ASEAN works for peace and stability in Southeast Asia. Five national banking associations of these ASEAN countries founded a joint banking association in 1976. Later, other countries joined the original five members to work together on issues of mutual interest and increased globalization.
Try:  Additional information on the ASEAN Bankers' Association can be found on its website.

Asian currency units and domestic currency units

Similar to Euros, the ACU (Asian Currency Unit) is a unit of exchange based on the average of currency values used in 13 Asian countries. It is a bookkeeping unit used for all currency except the Singapore dollar, which is recorded in Domestic Banking Units (DBUs).
Try:  OpinionAsia provides an in-depth explanation of ACUs and how they are affected by Asian ties to the U.S. economy. Offshore Banking Today clarifies the difference between ACUs and DBUs.

Monetary Authority of Singapore

The Monetary Authority of Singapore (MAS) is the governing force behind banks in Singapore. As the central bank and issuer of currency, not only is MAS the source of the Banking Act, it also serves as a resource for local and foreign banks by providing listings of bank locations, information on banking regulations and descriptions of bank categories on its website.
Try:  Asia-Studies offers an overview on MAS. Information on the Banking Act is available from Singapore Statutes Online, a website operated by the Government of Singapore.