SUPERNEWS

Equities

DBS Digital Ban Lifted by MAS, S$1.6B Cap Requirement Stays

Singapore lifts DBS' digital banking restrictions, maintains $1.2 billion capital requirement for operational risks.

By Mackenzie Crow

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4/30, 06:37 EDT
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Key Takeaway

  • Singapore's MAS lifts a six-month ban on DBS for non-essential activities, imposed due to digital service disruptions.
  • Despite the lift, MAS maintains an additional capital requirement of S$1.6 billion ($1.2 billion) on DBS for operational risks.
  • DBS CEO Piyush Gupta highlights system improvements and anticipates sharing progress in the upcoming quarterly report.

Regulatory Restrictions Lifted

Singapore's largest bank, DBS Group Holdings Ltd., has seen the end of a six-month ban on non-essential activities imposed by the country's financial regulator, the Monetary Authority of Singapore (MAS). This decision comes after DBS made significant improvements in addressing issues related to a series of service disruptions in its digital banking services throughout 2023. The restrictions, which were effective from November 1, included prohibitions on acquiring new business ventures and mandates to reduce the size of its local branch and ATM networks. These measures were part of the regulator's response to the fallout from the digital banking glitches experienced by DBS customers.

Continued Capital Requirements

Despite the lifting of the ban, MAS has decided to maintain an elevated additional capital requirement on DBS' risk-weighted assets for operational risks. This requirement, established in May 2023, involves a 1.8 times multiplier, translating to approximately S$1.6 billion ($1.2 billion) in total additional regulatory capital. The regulator has emphasized that this additional capital requirement will remain in place until DBS demonstrates its ability to maintain service availability and reliability, as well as effectively handle any potential disruptions. MAS has committed to closely monitoring the bank's progress on the remaining improvements and the effectiveness of the measures implemented.

Bank's Response and Future Plans

DBS CEO Piyush Gupta expressed that the pause in non-essential activities allowed the bank to reflect on and address areas needing improvement. He stated, "The pause has allowed us to reflect on the areas we needed to improve on, and to better address them." In response to the challenges faced, DBS has been working on simplifying and enhancing its systems architecture among other measures. The bank is set to report its first-quarter results soon, which will likely provide further insights into its operational improvements and financial health following the regulatory challenges.

Management Quotes

  • Piyush Gupta, CEO of DBS Group Holdings Ltd.:

    "The pause has allowed us to reflect on the areas we needed to improve on, and to better address them."