Bank buyouts: Clients to get Singdollar protection for a year

Ms Wong is taking over as CEO of the Singapore Deposit Insurance Corporation from Mr Ooi, who is retiring. She will assume the new role on May 1.
Ms Wong is taking over as CEO of the Singapore Deposit Insurance Corporation from Mr Ooi, who is retiring. She will assume the new role on May 1.
Ms Wong is taking over as CEO of the Singapore Deposit Insurance Corporation from Mr Ooi, who is retiring. She will assume the new role on May 1.
Ms Wong is taking over as CEO of the Singapore Deposit Insurance Corporation from Mr Ooi, who is retiring. She will assume the new role on May 1.

Customers with Singdollar deposits in a bank being bought out by another lender will continue to enjoy separate protection for one year after the date of acquisition, said the Singapore Deposit Insurance Corporation (SDIC) yesterday.

The assurance came in response to ANZ customers concerned about their deposits after the bank sold its Asian wealth and retail business to DBS Bank.

Depositors can include individuals, charities, sole proprietorships, partnerships, companies, as well as unincorporated entities such as associations and societies.

SDIC administers the Deposit Insurance Scheme, where a depositor of a member bank or finance firm is automatically insured up to an aggregate of $50,000 for each person depositor per scheme member. If a customer has insured deposits of $50,000 in the acquiring bank and the one being bought at the point of the acquisition, he will be insured up to $100,000 for a year from that date. The total protection amount depends on the depositor's balances with the respective scheme members as of the acquisition date.

Assume that a depositor, prior to an acquisition, has insured deposits of $60,000 with Bank A and $30,000 with Bank B. After the acquisition, the depositor would be insured up to $80,000 ($50,000 from Bank A + $30,000 from Bank B) with Bank A (the acquiring bank) during the additional one- year cover period.

"The deposit protection limit for these overlapping depositors reverts to a maximum of $50,000 after one year," said SDIC chief executive officer Ooi Sin Teik.

The additional coverage is intended to provide certainty to depositors, as well as giving them time to consider other options.

Mr Ooi, 65, will retire on April 30. CEO-designate Denise Wong will take over on May 1. She was previously deputy general counsel, director and head of prudential risk division at the Monetary Authority of Singapore. She has been seconded to SDIC for three years. The SDIC also administers the Policy Owners' Protection Scheme, which offers protection for life and general insurance policies, subject to limits.

A version of this article appeared in the print edition of The Straits Times on March 24, 2017, with the headline 'Bank buyouts: Clients to get Singdollar protection for a year'. Print Edition | Subscribe