Tuesday, March 11, 2014

DBS says property is not an asset

DBS continues to surprise me.  This morning, one of its officers called to inform me that I could not use my property as evidence of my risk-free status so that I could qualify for an increase in credit limit for my credit card.

The reason? It does not consider a property worth more than $2 million an asset despite the fact that the Monetary Authority of Singapore has told me in an email (see posting below) that it is one of the criteria which the bank can use.

I do not know the rationale for the bank taking this position but I told the officer that I would like to get to the bottom of this. I have written to the MAS -- again -- to seek clarification .

But I think I should also write to the bank officially to find out .

Monday, March 10, 2014

MAS reply shows DBS was not transparent

After posting about my unhappiness over DBS's treatment of retirees regarding credit card limit (headlined "Inflexible DBS over a simple matter), I wrote to the Monetary Authority of Singapore (MAS) to ask whether it was responsible for making such a ridiculous ruling.
Last week, the MAS responded.  I am happy to report that it is in fact the bank that has not been totally open and transparent with me.

To recap, I had asked for a permanent increase to my credit limit but was rejected even though I had more than enough funds in the bank to cover my spendings.

However, DBS said I would only be allowed to do so if I could fill up an employment income form. If not, I had to provide a secured deposit. 

I told them that it was ridiculous since I was a retiree.  It never even bothered to ask whether I had other forms of income or assets.  How's that for risk management???

As for the secured deposit option, I said it was an inconvenience, and I wasn't interested in a pittance that it pays in interest.

From the MAS response, it is apparent that the DBS officers who spoke to me were either not aware or did not bother to ask whether I had other forms of income or had assets worth more than $2 million.

This morning, I spoke to a DBS officer and told her about what the MAS had said.  I said I was re-applying for a permanent credit limit increase.
Now I wait anxiously for enlightenment.

Lastly, I would like to apologise to the MAS for assuming that it had made an unfair ruling.

Below, my email to the MAS and its reply...

"Dear regulator,

I have been trying to get my bank to increase my permanent credit card limit so that it would be more convenient for me to pay for goods and services that require a substantial sum of money.

So far, I have been unsuccessful because I am told that a recent MAS ruling requires retirees like me to submit evidence of employment income even though such people may have more than enough funds in the bank to cover their spendings.

I find this MAS ruling so ridiculous. Why do you have a rule that cuts across the whole spectrum of retirees without thinking of the consequences? Don't you think that there is a possibility that some retirees might have more money than others? And surely they deserve the right to spend a little more on themselves in their twilight years.

 This rule also shows that MAS does not trust our bankers to be able to do the right thing. If not, why are you not allowing them some leeway when it comes to granting credit limits to  those retirees who do not pose any credit risk.

Please confirm that this rule is iron-cast and that our banks are not allowed to show any flexibility whatsoever when it comes to increasing the credit limits for retirees.

At a time when there is so much talk about caring for the elderly, it is sad to know that MAS could come up with a rule that is clearly and totally discriminatory."


"We refer to your email dated 25 February 2014.

We understand your frustration in this matter, and thank you for allowing us the opportunity to clarify our credit card rules.  Under MAS’ credit card rules, a bank is not required to obtain proof of its cardholder’s income before granting him a credit limit increase where the increase is fully secured by deposits placed with the bank.

Where the credit limit increase is not fully secured, the bank is generally required to verify the cardholder’s income before granting the credit limit increase.  This is to ensure that the new credit limit granted accords with the regulatory limit of 4 months’ income (for those earning at least $30,000 a year) and 2 months’ income (for those earning less than $30,000 a year).  However, banks are allowed to grant credit limits above the regulatory limits to a cardholder who has total net personal assets exceeding $2 million or annual income of at least $120,000.  In verifying the cardholder’s annual income, the bank is not limited to considering employment income.  The bank is also permitted to take into account non-salaried income such as rental, dividend and interest income. 

We hope the above has been of assistance.  Please feel free to let us know if you require any further information.

Thank you.


Xiu Si
Corporate Communications Officer
Monetary Authority of Singapore"