Plans afoot to raise coverage of deposit insurance scheme to $75k
The deposit insurance scheme that protects up to $50,000 of a depositor's savings in a bank or a finance company is in line for an upgrade.
One key proposal is to raise coverage to $75,000. The coverage limit was last raised from $20,000 to $50,000 in 2011, a move that covered more than 90 per cent of those who placed deposits at the financial institutions. Public consultation will end on Sept 4.
The deposit base has grown over the years. Now, only 87 per cent of those insured are fully covered, the Monetary Authority of Singapore (MAS) said yesterday.
The new limit of $75,000 "will restore the percentage of fully insured depositors to more than 90 per cent, in line with international norms", it added.
In the United States, for instance, the standard insurance amount is US$250,000 (S$340,000) per person per insured bank.
The MAS, which wants public feedback on the proposals, also said that it plans to raise the annual premium rates levied on full banks and finance companies, and to grow the deposit insurance fund size.
The Singapore Deposit Insurance Corporation (SDIC) noted previously the fund size was estimated to be almost $101 million as at the end of March 31, 2012.
Now, "based on the (most) recent audited financial statements, the fund size is estimated to be at nearly $255 million", said the SDIC.
OCBC Bank did not comment, while United Overseas Bank said consumers will have "greater peace of mind".
Ms P'ing Lim, DBS Bank's head of deposits and secured loans, said: "With higher coverage, banks across the industry will bear higher costs due to increased premiums, but this is not expected to have a significant impact on the banks' expenses."