SINGAPORE, Dec. 4 (UPI) -- It was a case of second time lucky for HSBC and Malayan Banking Berhad, Malaysia's largest bank, when they obtained Tuesday the two Qualifying Full Bank licenses up for grabs from the Monetary Authority of Singapore.
Both bank had applied for the QFB license in 1999, when the first 4 licenses were issued, but were passed over when Citibank, ABN AMRO, BNP Paribas and Standard Chartered won.
This time around they beat to the post Bank of China and American Express Bank, which were also bidders in 1999. HSBC and Malayan Banking Berhad, or Maybank, were the largest foreign retail banks in Singapore that did not have QFB licenses. Those take effect from Jan. 1.
The QFB license allows banks to open up to 15 banking locations (of which 10 can be branches and the rest offsite automated teller machines), and offer wider consumer banking services. Foreign banks with full banking licenses can also share their ATM networks among themselves and provide debit services through their own electronic payment systems.
From next July, QFBs will be also allowed to issue debit cards and provide both Supplementary Retirement Scheme and CPF Investment Scheme accounts to their customers.
Eric Gill, general manager and chief executive officer, HSBC in Singapore, said the bank was delighted to be awarded QFB status.
"In a nutshell, with QFB status, we are in a better position to grow what is already a strong franchise for HSBC in Singapore," he said.
"Our initial areas of focus will be on making it more convenient for our customers to access their bank through an expanded ATM network and Debit Cards. We will be looking at a number of potential off-site locations, and exploring the possibility of a shared ATM network with other QFB banks," Gill added.
HSBC has plans to become a CPF agent bank, to complement the full range of financial planning and wealth management services that it already offers to clients.
Maybank officials were not available for comment.
Today's announcement by the Monetary Authority of Singapore represents the second phase of its banking liberalization program, announced over the summer, which aims to foster greater competition.
The MAS is making a fundamental shift toward its licensing regime toward a distinction between retail and wholesale banks, away from the current three-tier licensing regime of Full, Restricted and Offshore Banks.
As part of this plan, the MAS also awarded Monday wholesale banking privileges to 16 banks. Wholesale banks may engage in the same range of banking businesses as full licensed banks except that they are not allowed to accept Singapore dollar fixed deposits of less than $250,000 (Singapore) and are not allowed to pay interest on Singapore dollar current accounts operated by individual residents.
It upgraded eight exiting Qualifying Offshore Banks to Wholesale Banking: The Bank of Nova Scotia; Credit Lyonnais; The Dai-Ichi Kangyo Bank Limited; The Industrial Bank of Japan Ltd; KBC Bank NV; National Australia Bank Ltd; Norddeutsche Landesbank Girozentrale; and The Tokai Bank Limited.
The other banks awarded wholesale banking privileges are Australia & New Zealand Banking Group Limited; BNP Paribas Private Bank; Credit Suisse; ING Bank NV; The Northern Trust Company; Sanpaolo IMI SPA; Unicredito Italiano SPA; and Westdeutsche Landesbank Girozentrale.
In a statement, the MAS said it will progressively award Wholesale Banking privileges to all the remaining Offshore Banks, as well as to reputable new foreign bank entrants into the Singapore market. The MAS is expected to grant wholesale banking privilege to four more banks over the next year.
MAS will also consider further steps to liberalize the retail banking sector, including extending QFB privileges to more foreign banks, "in a phased manner."
