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 | BANKING HOURS |
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| | Why can't banks start their operating hours earlier so that the working public can carry out their banking transactions before going to work?
The major retail banks in Singapore currently start their operations at either 9.00 am or 9.30 am and have no plans to start earlier. Also, most of them have invested heavily in alternative delivery channels such as automated teller machines, phonebanking and PC banking which provide 24-hour banking service for the benefit and convenience of bank customers. With the availability of these electronic banking facilities, there is little need for the working public to visit bank branches often. There are also banks which offer night banking hours to meet the needs of those customers unable to conduct their banking transactions during office hours.
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| | Is Saturday a banking holiday in Singapore?
Saturday is not a banking holiday in Singapore. However, some banks choose to operate on a five-day week and are therefore closed on Saturdays.
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| DEPOSITS & LOANS |
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| | Why is it that when banks slash interest rates for deposits, the cuts are substantial but when they reduce their prime rate, the reduction appears to be minimal? Banks should not increase their profits this way.
Prime and deposit rates reflect market conditions including the level of interbank rates. Generally, banks do not lend money based on their prime rate alone. Increasingly, banks are charging interest based on interbank rates. Furthermore, not all deposits are used to fund prime-pegged loans. Neither do banks necessarily fund prime-pegged loans with only deposits. Hence, it is erroneous to assume that banks are increasing their profits by widening the gap between their prime and deposit rates.
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| | If the maturity date of my Fixed Deposit falls on a non-working day (eg Sunday, public holiday), would I be paid interest for that non-working day?
When the maturity date of the Fixed Deposit falls on a non-working day, the maturity date will be moved to the next working day and interest paid accordingly for the non-working day(s). Should a public holiday be declared at short notice after the placement and before the maturity date, the bank will similarly adjust the maturity date and pay interest.
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| PRIME LENDING RATES |
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| | What is the definition of Prime rates and floating rates?
The Prime rate is the lowest lending rate which a bank is prepared to
lend in Singapore Dollars to its best customers on an overdraft or demand
basis. A floating rate is one which is not fixed, and is pegged to an index
rate eg Prime + 1%, and "floats" according to the movements in the index
rate.
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| | How do banks in Singapore derive their prime rates?
Lending rates are determined by banks based on their cost of funds,
plus a spread to cover credit risks, operating expenses and a desired return
on shareholders' funds.
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| | Are there any upper and lower limits that local banks peg their prime
rates?
There is no upper or lower limits for local banks to peg their prime
rates to. However, all banks must notify the Monetary Authority of Singapore
in advance of any changes in their prime rates.
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| CHEQUE ISSUES |
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| | Currently, anyone who wants to encash a cheque has to do so at the bank branch which issued the cheque. Why can't this be done at any of the branches of the bank?
Many retail banks in Singapore allow customers to encash cheques at branches other than at the home branch of the account holder, although for control reasons, limits could be placed on the amount to be withdrawn. There are a few banks that do not allow encashment other than at the home branch as they do not have a customers' signatures on-line verification system. However, banks are in the process of implementing a system to make the encashment of cheques more convenient.
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| | Are there any safeguards which recipients of cheques can take against the cheques being subsequently dishonoured?
It is the general practice for the party accepting personal cheques to sight the identity card of the payer and record his personal particulars, including address and telephone number. Businessmen should know that personal cheques can bounce due to various reasons and if they accept personal cheques, then they must know that they are accepting the risks attached. Any business, as a matter of prudence, should conduct its own credit assessment of the parties it deals with before entering into a business transaction and agreeing on the mode of payment. Banker's cheques or cashier's orders are available to those who need assurance that payment would be honoured.
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| | What is the banking practice relating to cheques that are not crossed, with the payee's name/NRIC number indicated and the word "bearer" cancelled?
As a general rule, if the word "bearer" is deleted and the cheque is not crossed, banks would allow only the named payee to obtain cash for the cheque.
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| E-BANKING |
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| | Is the security provided by Secure Sock Layer (SSL) safe enough for banking transactions to be carried out on the Internet?
Banks in Singapore generally adopt the Secure Sockets Layer 128-bit encryption standard, an international standard which is considered secure and adequate for encrypting data transmitted over the Internet. This standard is also widely used by other financial centres in the world. Our member banks will continue to track best practices in encryption standards internationally.
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| | How can consumers be certain that e-banking is safe and secure?
Security issues remain a paramount concern to banks in Singapore, whether the consumer uses traditional channels or the Internet. However, regardless of the technology or medium, both banks and customers have a responsibility to ensure that transactions are carried out in a safe and secure manner. Customers have to protect their data, such as the PIN number, log-in information or passwords. If they don't, then they are putting themselves at unnecessary risk.
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| | If the accounts of Internet consumers are compromised as a result of using e-banking, will they be compensated if money is withdrawn by hackers, for example. Will the consumer have a case against the bank if there is no negligence on the consumer's part?
Banks generally have clear policies, which are communicated to the customer before he opens an online account, on the responsibility of the bank and the customer, and how they will determine compensation. All loss situations will be thoroughly investigated and banks will act fairly and equitably depending on the circumstances behind the loss. As a principle, banks do compensate customers for losses arising from fraud and security breaches for which the customers are not at fault.
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| | Banks are encouraging consumers to use Internet banking, or e-banking, to perform transactions but many transactions still cannot be done over the Internet -- including paying for most goods and services or paying an individual who does not want his account number to be known. Why should I be tempted to use e-banking at this stage?
The banking industry is experiencing rapid changes and challenges such as new customer needs and trends, and banks have responded to these changes by introducing new and innovative product offerings. On their part, customers should consider factors such as product features, pricing, the risks involved, and their terms and conditions in making their decisions.
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| SME - CREDIT APPLICATION PROCESS |
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| | What are the available financial assistance schemes offered to SMEs and how to qualify for them?
Government Assistance Schemes, currently available are namely, Local Enterprise Finance Scheme (LEFS), Micro Loan Program, Loan Insurance Scheme (LIS), Bridging Loan Program and Regionalisation Finance Scheme (RFS).
To qualify for such schemes, you must meet the following criteria:
-At least 30% local equity
-Fixed assets (defined as net book value of factory building, machinery and equipment) not exceeding $15 million
-Employment size not exceeding 200 workers*
* For Micro Loan Program, the applicant must have an employment size of not more than 10 workers (if it is in the service industry, it's group employment size must not exceed 200 workers).
For more information on government assistance programs, please contact the SME First Stop Call Center at (65) 6898 1800 or e-mail firststop@spring.gov.sg.
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| | How does my company apply for a credit facility with the bank?
You may call a bank or visit any of its branches and its customer service officers would be able assist you with the credit application process, which may vary from bank to bank. In most cases, the bank will require you to submit the following documents for processing:
- Application Form (if any)
- Notice of Income Tax Assessment of key promoter/director(s) (latest two years)
- Financial Statements (latest two years, with at least one year audited for Private Limited Companies)
- Other bank statements (latest three months)
- Personal account statements for sole proprietor/partners (latest three months)
- Business Plan (for startups only)
- Memorandum & Articles of Association for Pte Ltd company
- Profile of the promoter/sponsor/director(s)
On occasion, the bank may require you to meet with their representative in person.
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| | What documents do I need to present to the Bank when I require credit facilities? How much do I need to tell the Bank?
Banks will generally ask for a current copy of your audited financial statements and latest management accounts, bank statements and business plans. This will give them a better understanding of your business needs and financial strength. You should be open in sharing your plans and commitments so that the Bank can help you structure appropriate facilities.
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| | What basic criteria does my company need to satisfy in order to obtain banking facilities?
Depending on its credit policies and requirements, the bank typically evaluates the applicant based on the following criteria:
- Business Plans/Cash flow projections>
- Positive networth (typically comprising paid-up capital and accumulated profit/loss) which should be commensurate with the nature of the business>
- Ability to service monthly installments or financial obligations >
- Satisfactory conduct of operating bank account/s >
- Background information on the applicant/promoters and personal guarantors.
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| SME - LENDING CRITERIA/COLLATERAL REQUIREMENT |
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| | Why is it that banks appear not prepared to lend if you have no collateral?
The most important consideration for Banks in extending credit is your ability to pay. If you are able to show that you have good repayment ability, the Bank will review your application favorably.
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| | Why do bankers ask so many questions when I apply for a business loan when they are getting tangible security like property mortgages for their loan?
The most important consideration for Banks in extending credit is your ability to pay. The questions asked are intended to help the Bank to have a better understanding of your business. This process, will in turn, help the Bank in the assessment of your application.
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| | Why do banks insist on personal guarantee of directors when I have already mortgaged my property to them?
Banks generally ask for personal guarantee of the directors as a sign of commitment by the directors towards the facilities granted.
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| | The value of my property that I provide as security for bank financing has dropped by 30%, would my credit line be automatically cut?
Depending on the Bank?s lending policies and the terms of the credit facility and its structure, the Bank may trigger a request for security top up or partial loan repayment.
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| | Are banks more interested in the large corporations and not small enterprises like mine?
The Small and Medium Enterprises make up a significant portion of businesses in Singapore. In fact, many Banks have dedicated account officers to manage the accounts of small and medium enterprises, and they are a separate and distinct team from Corporate Banking, which looks after the large corporations. SMEs form an important business component of Banks.
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| | Is it not true that banks are only supportive in good times and in a crisis they will pull lines?
Banks have been supportive in bad times as they have helped SMEs restructure facilities to ease their repayment during crisis. It is advised that customers should try to stay with their ?regular? bank as far as possible so that a meaningful relationship can be built up.
Note:
Not all banks are Participating Financial Institutions (PFIs) in the various schemes.
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| MISCELLANEOUS |
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| | Can current accounts be used to top-up Cash Cards?
Cash Card top-ups can be effected by both savings and current account holders as long as they have an ATM card issued by one of the participating banks. Bank customers who wish to use their current account to top-up their Cash Cards may contact their banks to apply for an ATM card if they do not already have one.
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| | The Association of Banks in Singapore should look into the practices of those members which impose higher interest rates and service charges on their customers.
The Association does not set or control interest rates and bank charges. Banks are free to set their own rates and charges, and these rates and charges are set in a competitive marketplace. Customers have a wide choice of banks and are encouraged to shop around for the best deal.
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