SINGAPORE - The Association of Banks in Singapore (ABS) have released a set of guidelines to ensure responsible lending by banks to companies with higher risks of malpractices.
In a press conference on Thursday (Oct 8), ABS said the guidelines will comprise environmental, social and governance (ESG) criteria.
Broadly, the guidelines will require banks to provide disclosure of senior management's commitment to responsible financing. This will become part of the banks' annual reports starting next year.
Banks must also allocate resources to implement internal controls and increase staff awareness on responsible lending by 2017, ABS director Ong-Ang Ai Boon said.
Eight Industries have been highlighted as targets for the guidelines. These include forestry, agriculture, energy and mining.
The guidelines were set up by a taskforce formed earlier this year, but they were announced at a time when some Singapore banks have come under scrutiny over alleged financing partnerships with companies suepected for causing the forest fires in Indonesia.
Mrs Ong stressed that the guidelines would not be a silver bullet to solving ESG breaches such as the current haze crisis.
The guidelines are instead intended as a structured framework for individual banks to set up relevant policies. Beyond that, ABS will not dictate the course of actions taken by member banks, Mrs Ong noted.
But while the guidelines are not prescriptive, they will help change corporate cultures in the long term, she added.