SINGAPORE, June 28 (Xinhua) -- The Monetary Authority of Singapore (MAS) has published a public consultation paper on proposals to increase deposit insurance (DI) coverage per depositor to 100,000 Singapore dollars, and to improve the clarity and operational efficiency of the DI Scheme.
The proposed increase will result in 91 percent of depositors being fully covered by DI, keeping pace with the growth in average deposit balances, according to a statement from MAS on Tuesday.
This level of DI coverage strikes the appropriate balance between achieving a high degree of coverage for depositors and managing the cost of the coverage which, if too high, will ultimately be passed on to customers.
These proposals arise from MAS' periodic reviews of the DI Scheme to ensure that it continues to fulfil its objectives of protecting small depositors in the event of a bank failure.
The DI limit was last reviewed in 2019 when it was raised from 50,000 Singapore dollars to 75,000 Singapore dollars, covering 91 percent of depositors at that time.
"The key to ensuring a safe and resilient banking system is through pre-emptive safeguards, meaning sound regulation and rigorous supervision by MAS, and effective governance and risk management by banks themselves," said Ho Hern Shin, deputy managing director (Financial Supervision) of MAS.
"DI complements these safeguards by providing a safety net for small depositors in the event banks were to fail. The DI safety net helps to provide confidence to small depositors but is no substitute to sound risk management and effective supervision." ■