DBS Bank unveils third round of liquidity relief for SMEs, individuals

Singapore

DBS Bank announced on Friday its third round of liquidity relief measures for individuals and small and medium-sized enterprises (SMEs). This follows the recently unveiled financial relief package outlined by the Monetary Authority of Singapore (MAS) and other industry bodies earlier in the week.

Singapore's largest bank will double the quantum of its digital business loan for SMEs to S$100,000, as part of efforts to grant SMEs access to additional working capital during this period. The collateral-free digital business loan was launched on Feb 26 and has "seen healthy interest" since then, according to DBS.

It is understood that the approval process for the digital business loan is typically faster than the SME working capital loan and temporary bridging loan.

SMEs will only need to service interest for the first 12 months, up from the original three-month interest service period. All processing fees will also be waived, usually pegged at 1 per cent of the loan quantum.

In addition, SMEs refinancing their commercial property loans with the bank from mid-April 2020 can opt to have a nine-month principal repayment moratorium, subject to meeting certain eligibility criteria. Customers will only need to service interest during these nine months.

These initiatives come in addition to the relief measures announced by MAS.

From April 6, banks are to allow its SME customers to defer principal payments on all secured term loans up to Dec 31, subject to eligibility. SMEs can also opt to extend the tenure of their loans by up to the corresponding principal deferment period. This relief will be available to SMEs that are not more than 90 days past due as at April 6.

Retail customers will be able to defer their home loan principal and interest payments till December and avoid late-payment interest with no impact on their credit bureau records, said DBS. This is on the condition that customers' income has been reduced due to the virus outbreak, and provided that the account is not in arrears for more than 90 days. This is in line with the earlier measures announced by MAS.

More than 900 customers have applied for DBS's six-month principal repayment moratorium for mortgage loans that was rolled out in February.

Consumers with outstanding balances accrued on credit cards and DBS Cashline can also apply to convert their balances into a term loan of up to five years, with effective annual interest rate capped at 7.96 per cent, and no penalty for early repayment. Customers who apply for DBS's new term loan relief package will need to furnish proof of a 25 per cent decline in their monthly income as a result of being impacted by the Covid-19 situation, which is in line with MAS guidelines.

DBS Singapore country head Shee Tse Koon said that the new round of relief measures will "help alleviate some of the challenges individuals may face in managing their cash flows".

"Amid the uncertainty engendered by the Covid-19 pandemic, we hope these measures will help ease some of the financial concerns on our customers' minds," he said.

DBS is among the financial institutions here which has come up with its own relief assistance since February to help credit worthy customers cope with the impact of the virus. The latest guidelines by MAS provide some uniformity and clarity on the various aid packages by the financial institutions.