Singapore's central bank imposes additional capital requirement on DBS Bank
Following disruptions to its digital banking services on March 29 and May 5, the Monetary Authority of Singapore has announced it will be taking over the management of Singaporean bank, DBS.
Following the recent disruption of DBS Bank's banking services, the Monetary Authority of Singapore imposed an additional capital requirement for DBS Bank on Friday.
The move follows the widespread inaccessibility of digital banking services by the bank on March 29, and the subsequent disruption of its digital banking and ATM service on May 5.
MAS said that this amount, along with the additional regulatory capital required by DBS for February 2022 of approximately 1.6 billion Singaporean Dollars ($1.21 billion), represents a total of $1.21 billion in additional capital.
According to MAS, the additional capital requirement for DBS now is a multiple 1.8 times its risk-weighted assets to account for operational risks. This is an increase over the 1.5 times MAS applied to DBS in February 2022 after the disruption of November 2021.
MAS could change the size of multiplier in the future depending on the results of ongoing reviews.
DBS responded by saying that MAS' latest actions will have a 0.3%-point impact on the DBS Group's common equity tier one capital ratio for March 31, 2023, reducing it to 14.1% from 14.4%.
In response, DBS Group CEO Piyush gupta stated that "Following March 29th incident, the Bank convened a Special Board Committee to oversee an independent expert's full review of our technological resiliency."
He added, "We will finish the review with the highest priority and implement all of our recommendations as soon as possible."
MAS now requires a comprehensive report it had directed DBS in March to complete to cover the incident of May, MAS stated.
Ho Hern Shin (Deputy Managing Director, Financial Supervision, MAS) said that the repeated inconveniences caused to the public are unacceptable.
She said that the additional capital requirement imposed now shows how seriously MAS takes this issue. "DBS Bank should not spare any effort to deal with the underlying problems that are causing these disruptions."