Banking Act 1970

Banking Act 1970 2020 REVISED EDITION This revised edition incorporates all amendments up to and including 1 December 2021 and comes into operation on 31 December 2021 An Act to provide for the licensing and regulation of the businesses of banks, merchant banks and related institutions, and the credit card and charge card business of banks, merchant banks and other institutions, and matters related thereto. [5/2016] [1 January 1971] PART 1 PRELIMINARY Short title 1. This Act is the Banking Act 1970. Interpretation 2.—(1) In this Act, unless the context otherwise requires — “agreement” means an agreement whether formal or informal and whether express or implied; “Authority” means the Monetary Authority of Singapore established under the Monetary Authority of Singapore Act 1970; “bank” means any company which holds a valid bank licence under section 7 or 79; “bank in Singapore” means — (a) a bank incorporated in Singapore; or (b) in the case of a bank incorporated outside Singapore, the branches and offices of the bank located within Singapore; “bank incorporated outside Singapore” means a bank incorporated, formed or established outside Singapore; “banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; “book” includes any record, register, document or other record of information and any account or accounting record, however compiled, recorded or stored, whether in written, printed form or on microfilm or by electronic process or otherwise; “business day” means any calendar day other than a Saturday, Sunday, public holiday or bank holiday; “capital funds” means — (a) in the case of a bank incorporated in Singapore — (i) in sections 31 and 33, its capital used for the purposes of complying with the capital adequacy requirements imposed under section 10; or (ii) in other sections of the Act, the aggregate of its paid‑up capital (excluding any amount represented by treasury shares) and its published reserves (excluding such reserves as the Authority may specify by written notice), deduction having been made for any loss appearing in the accounts of the bank; (b) in the case of a bank incorporated outside Singapore or a merchant bank incorporated outside Singapore, such net head office funds and such other liabilities as the Authority may, by written notice, specify; or (c) in the case of a merchant bank incorporated in Singapore, the aggregate of its paid‑up capital (excluding any amount represented by treasury shares) and its published reserves (excluding any reserves that the Authority may specify by written notice), deduction having been made for any loss appearing in the accounts of the merchant bank; “chief executive”, in relation to a company, means any person, by whatever name described, who — (a) is in the direct employment of, or acting for or by arrangement with, the company; and (b) is principally responsible for the management and conduct of the business of the company; “company” means any company defined in any written law for the time being in force relating to companies, any company formed pursuant to any Royal Charter or Letters Patent, and any company incorporated or registered under any written law in force in Singapore and includes any body corporate or unincorporate, whether incorporated, formed or established in or outside Singapore; “corporation” has the meaning given by section 4(1) of the Companies Act 1967; “credit facilities” means — (a) the granting by a bank or merchant bank of advances, loans and other facilities by which a customer of the bank or merchant bank (as the case may be) has access to funds or financial guarantees; or (b) the incurring by a bank or merchant bank of other liabilities on behalf of a customer; “director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director; “employee” includes an individual seconded or temporarily transferred from another employer; “executive officer”, in relation to a company, means any person, by whatever name described, who — (a) is in the direct employment of, or acting for or by arrangement with, the company; and (b) is concerned with or takes part in the management of the company on a day‑to‑day basis; “financial holding company” means a company designated by the Authority under section 4 of the Financial Holding Companies Act 2013; [Act 13 of 2013 wef 30/06/2022] “financial year” has the meaning given by section 4(1) of the Companies Act 1967; “foreign company” has the meaning given by section 4(1) of the Companies Act 1967; “foreign-owned bank incorporated in Singapore” means a bank incorporated in Singapore, the parent bank of which is incorporated outside Singapore; “foreign-owned merchant bank incorporated in Singapore” means a merchant bank incorporated in Singapore, the parent bank of which is incorporated, formed or established outside Singapore; “Guidelines on Fit and Proper Criteria” means the document by that title issued by the Authority and published on its website, as revised from time to time; “licence” means — (a) a bank licence granted or held under section 7 or 79; or (b) a merchant bank licence granted under section 55S or treated as having been granted under section 64 of the Banking (Amendment) Act 2020; “limited liability partnership” has the meaning given by section 2(1) of the Limited Liability Partnerships Act 2005; “merchant bank” means any company — (a) that holds a valid merchant bank licence granted under section 55S; or (b) that is treated as having been granted a merchant bank licence in accordance with section 64 of the Banking (Amendment) Act 2020; “merchant bank in Singapore” means — (a) a merchant bank incorporated in Singapore; or (b) in the case of a merchant bank incorporated outside Singapore, the branches and offices of the merchant bank located in Singapore; “merchant bank incorporated outside Singapore” means a merchant bank incorporated, formed or established outside Singapore; “officer”, in relation to a corporation, includes — (a) a director, secretary or an employee of the corporation; (b) a receiver or manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and (c) the liquidator of the corporation appointed in a voluntary winding up; “parent bank”, in relation to a bank or merchant bank, means a financial institution which is able to exercise a significant influence over the direction and management of the bank or merchant bank (as the case may be) or which has a controlling interest in the bank or merchant bank (as the case may be); “parent supervisory authority” means — (a) in relation to a bank incorporated outside Singapore, a supervisory authority which is responsible, under the laws of the country or territory where the bank or its parent bank is incorporated, formed or established, for supervising the bank or its parent bank, as the case may be; (b) in relation to a foreign-owned bank incorporated in Singapore, a supervisory authority which has consolidated supervision authority over the bank; (c) in relation to a merchant bank incorporated outside Singapore, a supervisory authority that is responsible, under the laws of the country or territory where the merchant bank or its parent bank is incorporated, formed or established, for supervising the merchant bank or its parent bank, as the case may be; or (d) in relation to a foreign‑owned merchant bank incorporated in Singapore, a supervisory authority that has consolidated supervision authority over the merchant bank; “partner” and “manager”, in relation to a limited liability partnership, have the respective meanings given by section 2(1) of the Limited Liability Partnerships Act 2005; “person” includes a corporation; “place of business”, in relation to a bank or merchant bank, includes — (a) a head or main office; (b) a branch; (c) an agency; (d) a mobile branch; (e) any office established and maintained for the bank or merchant bank (as the case may be) for a limited period only; and (f) any other place used by the bank or merchant bank (as the case may be) for the conduct of any of its business; “published reserves”, in relation to a bank or merchant bank, means reserves in the accounts of the bank or merchant bank (as the case may be) that are duly audited or certified as correct by the auditor of the bank or merchant bank, as the case may be; “qualifying subsidiary” means a company which is a subsidiary of a bank incorporated in Singapore where such bank meets the requirements under section 9(1); “Registrar” has the meaning given by section 4(1) of the Companies Act 1967; “related corporation”, in relation to a corporation, means a corporation that is deemed to be related to the firstmentioned corporation under section 6 of the Companies Act 1967; “representative office” means an office established by a person to carry out liaison work, market research or feasibility studies, in relation to banking business, for use by the person; “savings account liabilities”, in relation to a bank, means the total deposits at that bank which normally require the presentation of passbooks for the deposit or withdrawal of moneys; “share” has the meaning given by section 4(1) of the Companies Act 1967 and includes an interest in a share; “sight liabilities”, in relation to a bank, means the total deposits at the bank which are repayable on demand, but does not include savings account liabilities or the deposits of any other bank at the bank; “sub-fund”, in relation to an umbrella VCC, has the meaning given by section 2(1) of the Variable Capital Companies Act 2018; [S 26/2022 wef 13/01/2022] “subsidiary” has the meaning given by section 5 of the Companies Act 1967; “substantial shareholder” has the meaning given by section 81 of the Companies Act 1967; “time liabilities”, in relation to a bank, means the total deposits at the bank which are repayable otherwise than on demand, but does not include savings account liabilities or the deposits of any other bank at the bank; “total number of issued shares”, in relation to a company, does not include treasury shares; “treasury share” has the meaning given by section 4(1) of the Companies Act 1967; [5/2016; 1/2020] [S 26/2022 wef 13/01/2022] “umbrella VCC” and “VCC” have the meanings given by section 2(1) of the Variable Capital Companies Act 2018. [S 26/2022 wef 13/01/2022] (2) Without affecting any other meaning which the word “insolvent” may have, a bank or merchant bank is, for the purposes of this Act, deemed to be insolvent if either it has ceased to pay its debts in the ordinary course of business or is unable to pay its debts as they become due. [1/2020]