Debt-ridden borrowers will be given more time to repay bank loans before new unsecured credit rules kick in.
The rules, which were first announced in September 2013, restrict financial institutions from granting further unsecured credit facilities or new credit cards to borrowers who hold debts exceeding their annual income for three consecutive months.
The Monetary Authority of Singapore (MAS) has decided to phase the rules in over four years – to give over-extended borrowers more time to adjust:
It added that financial institutions’ aggregate non-performing loan ratio is low, at 1.1 per cent, as of end-December 2014.
Credit Counselling Singapore and the Association of Banks in Singapore (ABS) will target these borrowers to help them reduce their debts.