Cold turkey
The tightening of unsecured credit lines might call for a multi-agency approach to dealing with the social fallout
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TWO years ago, the Monetary Authority of Singapore (MAS) decided to rein in excessive spending by debtors - a sensible move by all accounts. The thing was, at the point when the decision was made in September 2013 to limit unsecured credit facilities to 12 times one's monthly income, no comprehensive data was available on the number of people who had over-extended themselves.
The lack of data may have been surprising, given that the Credit Bureau Singapore (CBS) had been operating since November 2002. However, the truth of the matter is that the information that the CBS has is only as good as what its members, the financial institutions (FIs), are prepared to share - and it seems the banks continued to guard the data on their borrowers jealously.
Last June, perhaps pressed by the impending move by the MAS, the banks began sharing the information, so the industry has since come to know the size of the problem.
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