Singapore is an internationally-renowned financial center, serving not only its domestic economy but also the entire Asia Pacific region. The banking industry plays a key role in the financial market of the country and has quickly developed into one of the most powerful industries in the world.

Major players in Singapore and the wider banking industry

Factors such as a sound economic and political environment, favorable laws and tax policies, an honest system and strict law enforcement--especially against money laundering--have made Singapore the second-largest international financial center in Asia (after Hong Kong). Today, as many as 117 foreign banks and 6 local banks dominate the banking industry.

Factors contributing to the success of Singapore's banking sector

1.Liberalization of local commercial banking

2.Strengthening of regional businesses by local banks through mergers and acquisitions

3.Expansion of foreign banks, some of which have made Singapore a regional or even global platform for important banking services, making them even more competitive

4.Increasingly fierce competition stimulating the development of innovative products and more competitive pricing models.

5.Providing complete banking services such as corporate and investment banking, on top of traditional lending and deposit functions

6.A strict Bank Secrecy Act, tax incentives and a series of wealth management services have contributed to the prosperity of the private banking industry. The Swiss giants Credit Suisse Group and UBS AG have expanded their private banking operations in Singapore to meet the new needs of Asian and European customers.

7.Recognizing and meeting the needs of SMEs that make up Singapore's sizeable banking market.

Banking Regulations and Legislation

In Singapore, the regulations on banking are derived from relevant Acts passed by the Parliament (and its related subsidiary legislation), the common law, and the principles and rules of equity. Common law and the principles and rules of equity are derived from case law. These laws not only regulate Singapore's banking industry but also ensure that Singapore's banking legal framework keeps pace with the latest developments in the financial sector. Relevant regulations related to the banking industry include:

1.The Banking Act (Chapter 19, as amended in 2003) is the legislation governing commercial banks in Singapore

2. The Monetary Authority of Singapore Act (Chapter 186, as amended in 1999) is the legislation governing all matters relating to MAS and its operations

3. Anti-money laundering regulations

4. Guidelines on Payment, Clearing and Settlement Systems

5. Securities and Futures Act

Role of the Monetary Authority of Singapore (MAS)

In Singapore, the Monetary Authority of Singapore is the de facto central bank. It was established in 1971 to regulate Singapore's financial industry and spearhead its development into an international financial center. Its main function is to ensure the efficient and stable operation of the financial market in accordance with the national economic goals. MAS is responsible for the following work:

1.Implementing monetary policy

2.Acting as the central bank of Singapore

3.Bankers to the Government

4.Bankers to the banks

5.Managing the official foreign reserves of Singapore

6.Issuing currency

7.Issuing banking licenses

8.Serving as lender of last resort

Major Banks in Singapore

1. Major local banks

DBS Bank, founded in 1968, is the largest bank in Singapore and Southeast Asia asset-wise. It is a leading consumer bank in Singapore and Hong Kong, managing more than SGD 579 billion in assets in 2019, and has the largest retail network in Singapore. It was rated as the best bank in the world and in Asia in 2019 by Euromoney.

OCBC (Overseas Chinese Bank), the oldest Singapore bank, was established in 1932 by merging three local banks, the oldest of which was established in 1912. In terms of assets, it is now the second-largest financial service group in Southeast Asia and one of the highest-rated banks in the world—Moody's gives it an Aa1 rating. Overseas Chinese Bank is recognized as one of the 50 safest banks in global finance due to its strong financial strength and stability, and is rated as the best-managed bank in Singapore by The Asian Banker.

UOB (United Overseas Bank) was founded in 1935 and has become a leading bank in Asia. It has affiliated banks in Singapore, Malaysia, Indonesia, Thailand and China.

2. Major foreign banks

HSBC (Hong Kong and Shanghai Banking Corporation Limited) first opened its doors in Singapore in December 1877. HSBC is a recognized primary dealer and an approved bond intermediary (ABI) in the Singapore government securities market. It won 33 awards at the 2006 Global Finance Awards, as awarded by QFB.

Standard Chartered started its business in Singapore in 1859 and now has the largest international bank branch network in the Republic (at 20 branches). It is the second-largest consumer banking market of the Group and obtained the Qualified Full Bank (QFB) license in 1999. It is the largest foreign institutional custodian bank in Singapore and has remained among the best in Global Custodian's Agent Banks in Major Markets survey for seven consecutive years.

ABN-AMRO Singapore is now owned by Royal Bank of Scotland, Santander Bank and the Dutch government. At present, its various businesses have been relegated to different owners and integrated as such.

Maybank has been operating in Singapore since 1960 and is a fully licensed commercial bank. Maybank is currently one of the five largest banks in ASEAN and a qualified full bank in Singapore. As of June 2008, the total assets of Maybank in Singapore amounted to SGD 22.7 billion.

BNP Paribas has been at the forefront of Singapore's banking industry since 1968, and obtained its QFB license in 1999. Today, BNP Paribas Singapore has become the Group's regional hub investment bank and private bank in the corporate and commercial fields.

Citibank was the first American bank to open a branch in Singapore, in 1902. Although the retail banking industry arrived relatively late, the bank has grown into a strong market player, occupying a major market share in key businesses including unsecured loans and deposits, as well as investment and mortgage assets. Citibank is one of the four foreign banks that first obtained the Qualified Bank (QFB) license in 1999.