31 January 2018

On 1 January 2018, the Monetary Authority of Singapore (“MAS”) revised MAS Notices 612, 637, 811, 1005 and 1111 to incorporate amendments relating to the changes in the recognition and measurement of allowance of credit losses that are introduced in new Financial Reporting Standards that apply to banks, merchant banks and finance companies in Singapore for annual periods beginning on or after 1 January 2018.

MAS Notices 612, 811 and 1005 set out the requirements on credit files, grading and provisioning for banks, finance companies and merchant banks respectively. MAS Notices 637 and 1111 set out the risk based capital adequacy requirements for banks and merchant banks incorporated in Singapore respectively. By way of background, MAS released a consultation paper in May 2017 seeking feedback on proposed amendments to MAS Notices 612, 1005, 637 and 1111 relating to changes in the recognition and measurement of allowance for credit losses introduced in:

  • International Financial Reporting Standard 9 on “Financial Instruments” (“IFRS 9”); and
  • Singapore Financial Reporting Standard 109 on “Financial Instruments” (“SFRS 109”).

In October 2017, MAS released its Response to the feedback received on the consultation paper.

The amendments to the above MAS Notices are calibrated to meet MAS’ prudential objectives in areas where the expected credit loss (ECL) model under IFRS 9 and SFRS 109 may not fully address prudential concerns. Banks in Singapore are required to apply SFRS 109, or IFRS 9 for locally-incorporated banks that are listed on the Singapore Exchange Securities Trading Limited (SGX-ST), in the preparation of their financial statements for reporting periods beginning on or after 1 January 2018 in accordance with section 201 or 373 of the Companies Act.

Reference materials 

The following materials are available on the MAS website www.mas.gov.sg:

For commercial banks 

For merchant banks 

For finance companies 


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