Singapore sets up credit card bureau amid rising bankruptcies.
Singapore will establish an agency to help banks prevent credit card loan defaults amid a rise in personal bankruptcies in the city state, a senior official of the Monetary Authority of Singapore (MAS) said Thursday.
The Singapore Consumer Credit Bureau to be launched in September this year by the Association of Banks in Singapore with MAS support is expected to help lower credit loan defaults and delinquency rates, MAS managing director Koh Yong Guan said in a speech at a risk conference.
''The establishment of a credit bureau in Singapore is timely and will enhance the reliability of banks' internal credit rating systems,'' he said.
Last year, total card billings in Singapore were S$11 billion (about US$6 billion) and bad debt written off by financial institutions was S$79.5 million.
The personal bankruptcy rate rose 19% last year compared with the same period the previous year, while the rate of approvals for credit and charge increased 14.4%.
While consumer credit is rising in popularity among Asia's growing middle class and banks are competing fiercely for a share of this lucrative market, credit risks are also higher due to the current economic downturn.
The credit bureau will make available timely and reliable customer credit information to participating banks, Koh said.
Under the system, participating banks will disclose and in turn receive credit information from the credit bureau for the purpose of assessing the credit worthiness of their retail customers.
''The launch of the consumer credit bureau will mark the beginning of a new risk management process in Singapore. It will further bolster the integrity and transparency of Singapore's financial sector,'' Koh said.
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|Publication:||Asian Economic News|
|Date:||Feb 4, 2002|
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