BANKING (AMENDMENT) BILL

Order for Second Reading read, 3.38 p.m.

The First Deputy Prime Minister and Minister of Education (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The existing Section 42 of the Banking Act deals with banking secrecy in Singapore.

The Banking (Amendment) Bill, now before hon. Members, seeks to amend this section to improve the standard of banking secrecy in Singapore. The proposed amendment would also minimize the publicity that could arise when a bank seeks a court decision when there are conflicting claims to deposits with a bank.

The existing Section 42 of the Banking Act prohibits the divulgence of information on customers' accounts to non-residents. It is silent with respect to residents. The proposed amendment will extend the coverage to all persons.

In the proposed amendments, two other concepts are also introduced. The first is the requirement of a bank officer or a person, who has access to the records of accounts of bank's customers, to preserve the secrecy of the information at all times, i.e. even after a person ceases to be associated with the bank. The second is the provision for civil court proceedings to be held in camera. Information given during such proceedings will be secret between the court and the parties involved. The publication of the identities of parties involved in such court proceedings will also be prohibited.

Existing exceptions to the secrecy provision will be incorporated in the proposed amendment. These cover areas where the customer gives permission or is declared a bankrupt or where the information is required for commercial purposes or under the Evidence Act. Two additional exceptions are proposed in the amendment:-

(i) In civil cases, where a bank seeks the Court to interplead between conflicting claims, to money in a customer's account; and

(ii) In situations under any written law in Singapore where the information is required to be given to a public officer in the investigation or prosecution of a criminal offence. The laws defined for this purpose are Part IV of the Evidence Act, the Criminal Procedure Code, the Internal Security Act, the Income Tax Act, the Prevention of Corruption Act, the Kidnapping Act and the Companies Act. This exception is to allow interests of the State to take precedence over banking secrecy.

The amendments to the Act do not prevent the MAS from performing its banking supervision function of inspecting the books of the banks.

Sir, I beg to move.

Question proposed.

Dr Lee Chiaw Meng (Tanah Merah): Mr Speaker, Sir, may I seek clarification from the First Deputy Prime Minister. This is related to a certain provision in the Companies Act. I believe that section 69N of the Companies Act empowers a company to write to a member of the company to disclose the beneficial ownership of the shares. Now, with the present provision, can a bank which acts on behalf of someone, hide under this secrecy act and refuse to disclose the beneficiary owner? If it is so, it appears to be a loophole to circumvent the Takeover Codes of the SES.

Dr Goh Keng Swee: Can the hon. Member repeat the last part of his question? To circumvent what?

Dr Lee Chiaw Meng: Under the Takeover Codes, if one holds more than 20% of the shares of a company, one is obliged under the law to make a general offer to all the shares not in one's holding.

Dr Goh Keng Swee: I am not sure whether I agree with the hon. Member that that will be the consequence of this amendment. In the case of disclosure of ownership of shares in the company to be taken over, the subject comes under the Securities Industry Council. Whether the bank has such information or not is another matter. The provisions of banking secrecy refer to amounts of moneys placed in bank accounts. I am unable to give a clear direction on the issue he raised, but if he wishes to have further clarification I will be glad to look into the matter.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Goh Keng Swee].

Bill considered in Committee.

3.43 p.m.

[Mr Speaker in the Chair]

Clause 1 -

The Chairman: The citation year will be altered from "1982" to "1983".

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.