MAS proposes raising insurance coverage on bank deposits to $75,000 from $50,000

The Monetary Authority of Singapore (MAS) building in Shenton Way.
The Monetary Authority of Singapore (MAS) building in Shenton Way. PHOTO: ST FILE

SINGAPORE - The Monetary Authority of Singapore (MAS) asked on Friday (Aug 4) for public feedback on proposals to enhance the deposit insurance scheme.

The insurance scheme now protect deposits of up to $50,000 in banks and finance firms.

Singapore dollar-denominated deposits, such as those held in a savings, fixed deposit or current account, are covered under it.

A key proposal is to raise coverage from $50,000 now to $75,000 per person in a bank or finance firm.

The coverage limit was last raised from S$20,000 to S$50,000 in 2011. Back then, the move fully covered more than 90 per cent of those insured.

As the deposit base has grown over the years, said the MAS, only 87 per cent of those insured are now fully covered.

The new limit of S$75,000 "will restore the percentage of fully insured depositors to more than 90 per cent, in line with international norms", said the MAS.

The MAS proposes to achieve the targeted deposit insurance fund size of 30 basis points of total insured deposits in a progressive manner. The plan is to extend the build-up period of the fund from 2020 to 2028.

It will also raise the annual premium rates levied on full banks and finance companies for the deposit insurance coverage from 2.0-7.0 basis points to 2.5-8.0 basis points.

Members of the public and interested parties have until Sept 4 to give their views and comments on the proposals.