MAS slaps requirement on DBS to set aside additional $930m in capital due to November outage
DBS Bank will have set aside another $930 million in capital following the widespread outage of its digital banking services last November.
The Monetary Authority of Singapore (MAS) has imposed this additional capital requirement on Singapore's largest bank after it suffered its worst digital disruption in a decade, from Nov 23 to 25.
The central bank on Monday (Feb 7) said DBS will need to apply a multiplier of 1.5 times to its risk-weighted assets for operational risk. This translates to an additional amount of about $930 million in regulatory capital based on the bank's financial statements as at Sept 30.
Capital requirements are regulatory standards that spell out how much liquid capital - assets that are easily sold - banks must have on hand in relation to their overall holdings.
The disruption, which DBS attributed to a problem with its access control servers, led to customers being unable to log into the bank's internet banking platform and mobile app.
MAS noted deficiencies in DBS' management of the incident and recovery procedures to restore its digital banking services to a normal state, resulting in the prolonged disruption.
The regulator said it has directed DBS to appoint an independent expert to conduct a comprehensive review of the incident, including of the bank's recovery actions.
The independent review will also have to assess how a similar incident can be prevented in future, said MAS.
"DBS Bank must rectify all shortcomings identified from the review and implement measures to ensure that any future disruption to its digital banking services is resolved quickly and adequately.
"The additional capital requirement will be reviewed when MAS is satisfied that DBS Bank has addressed the identified shortcomings," it said.
Mr Marcus Lim, MAS' assistant managing director for banking and insurance, said the regulator requires financial institutions to have robust controls and processes to ensure that their IT systems are reliable and resilient, and essential financial services can be delivered continuously to customers.
"MAS will take appropriate supervisory action against any financial institution that falls short of our regulatory expectations," he added.