Singapore Regulator Bars DBS From Acquiring New Business Ventures For Six Months
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For six months, the Monetary Authority of Singapore (MAS) has barred DBS from many new business venture acquisitions. The regulator has announced this in response to several service disruptions witnessed by the bank this year.
DBS is the largest lender in Singapore, and the regulator has also required it to halt non-essential IT changes for six months. The MAS said these restrictions will ensure that DBS directs the needed resources and attention toward strengthening its risk management systems and controls.
Singapore Regulator Directs DBS To Make Changes
The Singapore regulator has also said that DBS will not reduce the size of branches and ATMs in Singapore for now. This will guarantee that the bank has ample alternative channels for customers in case of disruptions. The bank is also required to boost the operational resilience of digital channels.
The MAS noted that these restrictions would remain in play until the regulator is satisfied with the remediation plan announced by DBA Bank.
The deputy managing director at MAS, Ho Hern Shin, said, “DBS must put in place immediate measures to ensure service reliability while it continues to invest in the longer-term efforts to bolster its operational resilience. We have imposed this six-month pause on the bank to give it the space to take the actions needed to maintain customer trust.”
Service Disruptions At DBS
The changes announced by MAS come after the digital banking and payment services offered by DBS and Citibank were disrupted for several hours on October 14. The service disruptions were caused by a technical issue within a cooling system at an Equinix data center.
The service disruptions also affected DBS’ automated teller machines (ATMs). The move saw DBS reopen its branches on weekends to assist the affected customers.
Following these service disruptions, the Singapore financial market regulator ordered DBS and Citibank to conduct an in-depth investigation. The regulator also said these banks failed to recover their systems within the required timeframe.
The MAS also urged regulators to be cautious about service disruptions. The regulator said that its guidelines require that unscheduled downtime for critical services affecting the operations and services of a bank should not exceed four hours within a stipulated 12-month period.
Banking institutions are also mandated to have backup data centers and systems to mitigate the impact of service outages.
