THE Monetary Authority of Singapore (MAS) has imposed an additional capital requirement on DBS after its digital banking services suffered a third outage in 18 months.

Along with the additional capital requirement of S$930 million imposed on Singapore’s largest bank in February last year that was related to a disruption in November 2021, this brings the total additional regulatory capital requirement on DBS to approximately S$1.6 billion.

The additional capital requirement on DBS is now 1.8 times its risk-weighted assets for operational risk, an increase from 1.5 times before.

In a statement late on Friday (May 5), the central bank said it may subsequently vary the size of the multiplier depending on the outcome of ongoing reviews.

Ho Hern Shin, deputy managing director of financial supervision at MAS, said DBS has fallen short of the regulator’s expectations for banks to deliver reliable services to their customers. 

“The repeated inconvenience caused to the public is unacceptable. The additional capital requirement imposed at this time underscores the seriousness with which MAS treats this matter. DBS must spare no effort in dealing with the underlying issues leading to these disruptions,” she added.

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DBS said in a bourse filing late on Friday that MAS’ latest action would reduce the bank’s Common Equity Tier 1 capital ratio as at Mar 31, 2023 by 0.3 percentage point to 14.1 per cent.

Chief executive officer Piyush Gupta apologised, once again, for the digital disruptions. He had previously apologised just less than two months ago after the bank’s online services were disrupted for the entire business day on Mar 29, a lapse in service which MAS had then said was “unacceptable”.

“Our customers rightly expect more of us, and we are committed to doing better. Following the Mar 29 incident, the bank convened a Special Board Committee to oversee a full review of our technology resiliency with an independent external expert. We will complete the review as a matter of utmost priority and implement all recommendations expeditiously,” he said on Friday.

DBS clients started having issues accessing the lender’s digital banking services at around noon on Friday, as users of the DBS PayLah! app complained about not being able to log in to the app, or make payments through it on the bank’s Facebook page.

The app asked users to try again later, citing high log-in volumes due to its “5 Million Hawker Meals” programme. There was also intermittent access to its physical ATMs, according to comments on the bank’s Facebook page.

However, in a second update sent to the media in the evening, a DBS spokesperson said that the disruption was caused by a systems issue unrelated to the Mar 29 incident, or its “5 Million Hawker Meals” programme.

In its first update, the spokesperson said the bank’s digital systems returned to normal within 45 minutes, at 1.30 pm, with most of its ATMs up and running.

“Please be assured that our systems are uncompromised, and your monies and deposits remain safe,” the spokesperson had said, adding that the bank was sorry for the inconvenience caused.

As at 3.10 pm, normal operations had resumed at all its ATMs, said the bank.

MAS had earlier directed DBS to conduct a comprehensive review over the cause of the March outage, and is now requiring the bank to include Friday’s incident as well in its review, even though the causes of both incidents appear to be distinct.

The review of the bank’s IT resiliency covers an assessment of the adequacy of management oversight, staff competencies, operational processes, system resiliency, and architecture design for its digital banking services.

MAS is also requiring the bank to take immediate steps to improve the resiliency and recoverability of its existing system, including enhanced monitoring, more comprehensive testing and additional system redundancies, in order to minimise service disruption to its customers.

DBS shares closed 0.7 per cent or S$0.23 lower at S$31.90 on Friday.