SINGAPORE -- American banks will gain greater access to Singapore's retail banking sector under the terms of the Free Trade Agreement (FTA) thrashed out this week, according to a report in The Star.
The Monetary Authority of Singapore (MAS) said the FTA would progressively remove the quota on Qualifying Full Bank (QFB) and wholesale bank licenses for U.S. banks that meet its prudential criteria; allow American QFBs to set up more branches and off-site ATMs; and permit American QFBs to negotiate access to the local banks' ATM networks on commercial terms.
(See related story Singapore opens banking market, more ATMs follow)
"The phased approach set out in the FTA will give Singapore banks time to adapt to the competition and upgrade their capabilities,'' the MAS said in a statement.
As reported by Singapore's Business Times, the main beneficiaries of the retail banking concessions are expected to be Citibank and American Express. Citibank is one of the largest foreign players in Singapore, while Amex has in recent years been trying to win a QFB license, a special status under the MAS's phased liberalization program which grants foreign banks limited rights to relocate existing branches and install off-site ATMs.
Foreign bankers see access to the local banks' ATM networks as the biggest benefit, according to The Star, as it would open up an island-wide distribution channel for their products.
But as one observer told The Star, the ATM networks are the "crown jewel" of the local banks and they are not expected to let their rivals in on the cheap. As the networks are privately owned, there is little that the MAS can do if local banks choose to drive a hard bargain in their negotiations with foreign banks.
There are currently three ATM networks in Singapore, two owned by local banks and the third shared by three foreign banks.
