MAS action 'signals zero tolerance for financial system abuse'

Facade of the Monetary Authority of Singapore (MAS) building.
Facade of the Monetary Authority of Singapore (MAS) building. ST PHOTO: ALICIA TAN

Observers say swift, tough action by the Monetary Authority of Singapore (MAS) to shut down BSI Bank here sends a strong signal to the banking industry - and wider international community - that Singapore has zero tolerance for any abuse of its financial system.

The MAS yesterday withdrew Swiss-based BSI Bank's status as a merchant bank in Singapore, citing "serious breaches of anti-money laundering requirements" among other things.

BSI's Singapore branch has been operating since November 2005, offering private banking services.

Ms Foo Mee Har, a member of the Government Parliamentary Committee for Finance and Trade and Industry, said: "This strong action taken by MAS clearly demonstrates the authorities' commitment to ensuring that Singapore, as an international financial centre, is determined, transparent and ready to act decisively against breaches of anti-money laundering regulations."

Mr Chrisol Correia, director of international anti-money laundering compliance at LexisNexis Risk Solutions, said the regulator is countering the threat posed to the financial system here by economic crime and corruption, by making a priority of tackling money laundering.

Although rules have been tightened considerably, leading to increasing costs, Ms Tan Su Shan, co-chair of the MAS' private banking industry group, reminded industry players that "standards are lifted across the board".

When The Straits Times visited BSI's main office on the 31st floor of Suntec Tower One, security was tight and no visitors were allowed without an appointment.

The police were present at the building but did not comment.

The bank's premises seemed quiet. The 31st level was empty except for a receptionist and, occasionally, an employee who paced the corridors. Staff at the bank reception redirected queries to the bank's Swiss headquarters, while those who left the office after work either denied they were employees or refused to comment.

The MAS also referred six members of BSI's senior management and staff, including former wealth planner Yeo Jiawei, who has been charged in court, to the Public Prosecutor to evaluate any criminal wrongdoing.

Mr Tham Soon Kit, Asia-Pacific risk practice director at information services company Wolters Kluwer, noted that the consequences of such incidents suggest growing emphasis on personal accountability.

He said: "In such situations, senior management who may not have sufficient information to prove they took reasonable steps to prevent operational failure cannot use these reasons as an excuse to absolve themselves from fines or prosecution.

"Operational control policy implemented with a systematic approach helps banks to institute appropriate controls, and demonstrates to employees, international customers and regulators that strong governance is in place to support Singapore's pivotal role as a global financial centre."

• Additional reporting by Tan Fong Han

A version of this article appeared in the print edition of The Straits Times on May 25, 2016, with the headline 'MAS action 'signals zero tolerance for financial system abuse''. Print Edition | Subscribe