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February 8, 2022

MAS imposes additional capital requirement on DBS for service disruption

Singapore’s banking regulator has imposed an additional capital requirement on DBS Bank following the disruption in digital banking services in November last year. 

The Monetary Authority of Singapore (MAS) requires the lender to set aside additional capital equal to 1.5 times risk-weighted assets for operational risk.

This means DBS Bank will have to set aside an additional S$930m ($691.69m) in regulatory capital, based on the bank’s financial statements published on 30 September 2021. 

DBS’ services faced one of the worst outages in November that left many customers without access to internet banking.

MAS stated that it found deficiencies in DBS Bank’s incident management and recovery procedures and has asked it to appoint an independent expert to review the incident. 

MAS assistant managing director of banking and insurance Marcus Lim said: “MAS requires financial institutions to have robust controls and processes to ensure the reliability and resilience of their IT systems and the continuous delivery of essential financial services to their customers. 

“MAS will take appropriate supervisory action against any financial institution that falls short of our regulatory expectations.”

Responding to the MAS’ action, DBS CEO Piyush Gupta said: “Since the November incident, DBS has taken a series of actions to improve the resilience of our services and incident response. 

“Over the course of the next few months, together with an independent expert, we will continue to review our systems and processes to ensure that we do better going forward.”

The lender noted that the additional capital requirement will have a 0.4% point impact on its capital ratios. 

MAS will review the additional capital requirements after DBS Bank has addressed the flaws in its systems. 

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