Section 38

The Authority may, from time to time, by written notice to any bank in Singapore or class of banks in Singapore, impose requirements in relation to the minimum amount or amounts of liquid assets to be held by the bank or class of banks, having regard to the risks arising from the activities of the bank or class of banks (as the case may be) and such other factors as the Authority considers relevant.

For the purposes of subsection (1), the Authority may impose different requirements for different types of liquid assets.

Without limiting subsection (1), the Authority may, in a notice issued under that subsection, impose limits on each liquid asset or class of liquid assets to be held by a bank or class of banks.

Where the Authority issues a notice under subsection (1) to a class of banks, the Authority may require different banks within the class of banks to hold different amount or amounts of liquid assets, having regard to the risks arising from the activities of each bank, the systemic impact of each bank on the financial sector and such other factors as the Authority may consider relevant.

Whenever the Authority issues a notice under subsection (1), each bank must be allowed such period of grace, being at least 3 business days, as may be specified in the notice, in which to comply with its provisions.

A bank must not, during any period in which it has failed to comply with any requirement imposed under subsection (1), without the approval of the Authority, grant further advances to any person.

[Deleted by Act 5 of 2016]

The Authority may by written notice require each bank in Singapore to render such returns as the Authority considers necessary for the implementation of this section.

The Authority may, at any time, utilise the liquid assets of a bank held for the purposes of subsection (1) for the settlement of the bank’s payment obligations, book‑entry securities and instruments under any real‑time gross settlement system established and operated under section 29A of the Monetary Authority of Singapore Act 1970, even if this may result in the bank failing to comply with any requirement imposed under subsection (1).

Despite subsection (1) and subject to subsection (6E), a bank may, in accordance with the requirements imposed under subsection (6C), utilise its liquid assets held for the purposes of subsection (1) if the bank —

For the purposes of subsection (6B), the Authority may, from time to time, by written notice to a bank impose requirements in relation to the utilisation by the bank of its liquid assets held for the purposes of subsection (1), including —

A bank must, within such time as may be specified by the Authority, provide any information required by the Authority in relation to its liquidity stress situation and the utilisation of its liquid assets held for the purposes of subsection (1).

Where the Authority is of the opinion that —

Any bank which fails to comply with any requirement imposed under subsection (1) shall be liable to pay, on being called upon to do so by the Authority, for every day or part of a day of such failure, a financial penalty in accordance with such formula as the Minister may, by order in the Gazette, prescribe.

A financial penalty collected by the Authority under subsection (7) must be paid into the Consolidated Fund.

To avoid doubt, for the purposes of subsections (4) and (7), a bank is to be treated as having failed to comply with a requirement imposed under subsection (1) even if such failure is the result of an action of the Authority under subsection (6A).

Any bank which fails to comply with —

In this section —

“liquid assets” means any asset that can be easily sold or converted into cash at little or no loss in value, as specified in the notice mentioned in subsection (1);

“liquidity stress situation” has the meaning given in the Fifth Schedule.