Mr Speaker, Sir, I thank the Members who have spoken for their support for the Bill, and let me address the points which they have raised, all of which are valuable. First, Mr Leong Horn Kee has asked whether the rate of banking consolidation is fast enough. There has been some progress. DBS has merged with POSBank, but there have been no other mergers in Singapore, as he well knows. But, as I have said, no merger does not mean that nothing is happening. I am sure that the banks are talking to each other and I hope that something will develop as time passes. It is not something which we can do in a hurry. Arranging a match-making is a delicate business. One has to find the right partner and reach the right terms, otherwise it can end unhappily, and it is MAS' job to make sure that unhappy outcomes are kept to a minimum. So we will foster their consolidation but it will take a little bit of time. As for small companies and small depositors who may be affected by the consolidation of banking, this is an issue which we have discussed several times in this House. It is naturally of considerable concern to Members. DBS-POSBank is a major example, but there will be others because further consolidation will take place and further adjustments will become necessary. So one of the things which we are considering in MAS is whether we should not require many banks in Singapore to provide a basic banking account - not free, but affordable - with specified characteristics, which we can have the Association of Banks discuss and agree upon, so that whoever operates in the Singapore retail banking market will have to provide a service to look after the small depositors. It is something we are considering. We have to make sure that the burden is not too onerous, but we hope to reach a conclusion before too long. As for Internet banking and how they will be regulated, I completely share Mr Leong Horn Kee's and also Mr Ong Kian Min's scepticism about the risks of Internet and the hype about the dot-com euphoria which was very strong 12-18 months ago but is now substantially evaporated. I think it is right for us to allow a certain degree of experimentation by our banks, but in a cautious way. And one of the things which we have allowed is to say, "You may set up a subsidiary, only $100 million paid-up capital, and you can use that subsidiary to carry out Internet banking or all other banking activities, or form a joint venture with a foreign partner." $100 million is not a small sum of money. Our overall requirement for bank capital is $1 1/2 billion paid-up, but that is at the top level. To require the subsidiary of a bank also to have $1 1/2 billion tied up is not reasonable. In most other jurisdictions, one can set up a bank with much less capital than that. In the UK, it is only five million Euros, which is about S$7 million. In Hong Kong, it is HK$150 million, which is only about S$30 million. So our requirement of $1 1/2 billion is many orders of magnitude higher. It is there because we want to be absolutely safe and we also wanted the banks to have a certain critical mass and size. But there is no justification for applying that at the subsidiary level. So we have set the subsidiary level at $100 million, which is still higher than nearly everybody else. If you say that the burn rate will soon burn out the $100 million, I would reply with what one banking supervisor told me, that it makes him very nervous when he reads bankers saying that they are running an Internet bank and it is their business to lose money so as to gain customers. Because when banks start to think like that, trouble is going to come. And so we have a banking framework for Internet banking which puts in adequate safeguards so that if a bank wants to start, it has some flexibility but, before it goes too far, there will be some checks to hold it back. Mrs Lim Hwee Hua asked about the capital adequacy of banks and whether 12% was not already high, and whether going for even more on a supervisory discretionary basis would be an overkill. 12% is higher than the BIS standard of 8%. That is true. But I would make two points. Firstly, our banks are operating in Asia and this is a less stable environment than the OECD countries and economies. So it is wise to have a bigger capital cushion to deal with the uncertainties of the market. Secondly, although the BIS standard is 8%, nearly all banks in good health have much higher capital ratios than that. Very few banks operate at the margin, with just enough capital as specified by the regulator. So they have 12%-16% capital, enough to have a cushion without being so excessive that it affects their rate of return. I think 12% is about the right figure for us. We may revise it from time to time. We have revised the composition of this 12% already twice to give the banks more flexibility, but it is not in the wrong ballpark. When will we go above 12%? When we think the bank's risk profile or risk management capabilities or the health of the bank's loan book is such that it better have a bit more capital because, over all, its exposure is riskier. That has to be judged bank by bank. I think the circumstances will be that we will look at the individual banks to decide, and I do not expect very many banks to have additional supervisory impositions placed upon them over and above the general standard. But that will depend on how the practice evolves. With a Basel II framework which is being developed now, banks are moving towards internal risk models of loans, of operational risks, and will depend on these internal risk models to decide how much capital they need, rather than a certain formula set by the regulator. We hope that our banks in Singapore will be able to develop such risk models. They are working at it, but it will take some work and it also requires some pooling of data, because we need to have the track record to have reliable statistics as to how risky the loans are. If they have these risk models and if indeed their track record is good, then, of course, they will be able to save on their capital requirements and this will be to their advantage. So there is a positive incentive, as Mrs Lim Hwee Hua suggested should be done. On property exposure, Mrs Lim talked about the coverage being broadened because it will include loans to building and construction, and whether this will not be offset to a large extent by the exclusion of owner-occupied property loans. First of all, I should clarify that the coverage is not really broadened, because we are still focusing on property loans, ie, loans for property development. We are not going to impose limits on loans to construction service providers or people who provide building materials, because these are not property developers or property investors. They are providing services, goods. So, similarly, if you are an architect, you are not a property developer but you are providing services to the property developers. Or, if you are a civil engineer, construction engineer or a transport company, you are not in the business. So we are still focused only on property development. We have excluded the owner-occupied housing loans from our limits on property exposure, but it is not a departure from the Basel approach, which assigns risk weights because owner-occupied housing loans do tend to have a lower risk of default, so they do merit more lenient treatment than other property loans. We are not treating them completely as unrestricted. We will monitor them separately and, if necessary, we will limit them. And one of the limits we now have is to say home-buyers must make a 20% cash payment before they borrow money from the bank and the bank will only lend them 80%. It is a somewhat sore point with the developers, but that is a rule which we have. As for ownership status, Mrs Lim is right that it is a little bit difficult to find out who is living in a house. HDB has ways of finding out and there are severe penalties. If he is not really living in the house and he is found out, he may get evicted and the house may be re-acquired. If it is a private property, there is no such sanction. But, still, there is a distinction between a loan which is for owner occupation and a loan which is for an investment property. If it is for owner occupation, it is his first house, he is living in it, he is paying for it probably out of his income and, therefore, he is not so likely to default on it, whereas if it is an investment property and he is paying for it out of rental income and he loses his tenant, then he may be unable to service his mortgage. So there is a risk difference between an owner-occupied house and a house purchased for investment purposes. How will the banks know? The banks presently already ask borrowers to declare, when they want a loan, whether it is for owner occupation, and it is possible that one way is for the banks to regularly ask for a new declaration, and ascertain the position every year. It is not likely to be absolutely foolproof but I think adequate measures can be worked out. Finally, banking secrecy provisions. I will take Mr Ong Kian Min's comments on banking secrecy provisions first. Mr Ong asked what happens to the database of customer information which has been given to an outsource service provider to process and it goes bankrupt. Can he sell it? The answer is he cannot, because it is an offence under the Banking Act for a party receiving customer information from a bank in the course of performing an outsource function to onward disclose that information. So he cannot go and sell it to somebody else. If he is overseas, it is a bit difficult for us to enforce, because our laws do not stretch overseas. But before a bank outsources a service overseas, we will want to be satisfied that it is going to somebody overseas which the bank can, in good conscience, have confidence with. And the outsource service provider is in a country overseas where he can have some assurance that the rule of law applies and that it is not just a cowboy environment. These are standard precautions before we allow a bank to outsource its services. They will have to consult us and if there is a regulator on the other side, we will be in touch with the regulator on the other side to reach an understanding on the conditions before we approve. So there are some safeguards. On contravention of banking secrecy, Mr Ong says $250,000 is not an adequate penalty. It is not a small sum. It is five times bigger than any other penalty that used to be in the Act. It is the biggest penalty in the Act, as it will be amended. If it is still not enough and we need to multiply it by another factor of five, I will come back and ask the House for permission. But I think, for now, $250,000 is adequate. On sharing information about customers for cross-selling, Mr Ong and Mrs Lim made opposite suggestions. Mrs Lim talked about making it more flexible and allowing cross-selling even to non-financial institutions. Whereas Mr Ong says, "Why do we want to have cross-selling? Why not just restrict it to people who opt in and tick off in a box and agree to have their information shared around?" This is a judgment. It is a trade-off. On the one hand, the banks need the flexibility to cross-sell. On the other hand, the customer wants some privacy. Mr Ong talked about Internet sites invariably asking you whether you want to have your name being circulated around before they give your name to other service providers. I wish they were all so scrupulous. I receive all sorts of junk mail from people whom I never agreed to give my name to, and I am sure so does he. Usually, there is a mechanism to get your name off the list. I think what we need is a balance between the two, a balance which will enable cross-selling to take place without it being intrusive to the customer and without the customer feeling that his privacy has been compromised. I think there are two things we should do. First, there should be only limited customer information relating to a person's personal particulars which may be disclosed, and only to financial institutions. So, if your banker wants to cross-sell a product of the insurance company, he cannot tell the insurance company, "This is a good customer. He has X number of dollars in his bank account. Please go and offer him a $1 million insurance policy." He can give your name and you may be approached, but he cannot give particulars about accounts, transactions, assets and so on. I think that is not the purpose why people go to the bank in order to manage their money. So it should be only to financial institutions, only personal particulars and, secondly, there has to be an opt-out mechanism. So if I object or I tick off in a box, I will not have my particulars circulated around and not receive junk mail. We have tried to strike a balance in this legislation. It is a delicate balance. It is not one which is possible for MAS to strike on its own. We have discussed it with the banks very carefully. The banks are comfortable with these arrangements, and that is why I am here before the House commending this Bill to Members.