Statute Details
- Title: Banking (Exemption from section 29(4) and (5)) Regulations 2009
- Act Code: BA1970-S135-2009
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Banking Act (Chapter 19)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Enacting Power: Section 76A(1) of the Banking Act
- Commencement: 31 March 2009
- Key Provisions:
- Regulation 1: Citation and commencement
- Regulation 2: Exemption from section 29(4) and (5) for specified directors and specified losses
- Status: Current version as at 26 March 2026
- Legislative Instrument: S 135/2009
- Made Date: 30 March 2009
What Is This Legislation About?
The Banking (Exemption from section 29(4) and (5)) Regulations 2009 is a targeted subsidiary instrument made under the Banking Act. In plain terms, it creates a narrow exemption for certain bank directors in Singapore from specific consequences that would otherwise apply under section 29(4) and (5) of the Banking Act.
The Regulations are not a general reform of banking regulation. Instead, they address a particular category of losses—losses suffered by a bank on or after 31 March 2007—that arise from specified types of credit exposures. The exemption is designed to ensure that directors are not exposed to the statutory effect of section 29(4) and (5) when the loss is linked to unsecured credit facilities (or credit facilities that later become unsecured) and where the counterparty falls within a defined “director group” relationship.
Practically, the Regulations recognise that directors may be connected to persons through corporate or group relationships. Where the statutory framework would otherwise treat such relationships as triggering liability or consequences, the Regulations carve out an exemption in defined circumstances. This reduces the risk of unintended personal consequences for directors arising from particular credit losses.
What Are the Key Provisions?
Regulation 1 (Citation and commencement) is straightforward. It provides the short title—“Banking (Exemption from section 29(4) and (5)) Regulations 2009”—and states that the Regulations come into operation on 31 March 2009. This matters for determining the legal effect of the exemption, including how it interacts with losses that occurred earlier.
Regulation 2 (Exemption) is the core provision. It states that section 29(4) and (5) of the Banking Act shall not apply to the directors of a bank in Singapore in respect of a loss suffered by the bank on or after 31 March 2007. This is a key feature: the exemption is linked to losses occurring from a date earlier than the commencement of the Regulations. Such “backward-looking” effect is common where the legislature intends to clarify or correct the application of statutory consequences to past events.
The exemption applies only where the loss arises from one of the following categories of credit/exposure:
(a) Any unsecured credit facility granted to a specified person.
(b) Any credit facility granted, which subsequently becomes an unsecured credit facility, to a specified person.
(c) Any exposure to a specified person.
In each case, the “specified person” is defined by the relationship to the bank’s directors. The Regulations limit the exemption to a person who is a person in the director group of the bank by virtue only of paragraph (d)(i) of the definition of “director group” in the Fifth Schedule to the Act.
This is an important drafting constraint. It means the exemption is not triggered by every possible “director group” connection. Instead, it is triggered only where the person’s status as part of the director group arises solely from that particular limb of the Fifth Schedule definition. For practitioners, this calls for careful factual and definitional analysis: one must identify the exact basis on which the counterparty is within the “director group” and confirm that it is attributable only to paragraph (d)(i) of the Fifth Schedule definition.
Finally, the Regulations specify the temporal and causal nexus: the directors are exempt “in respect of a loss suffered by the bank on or after 31st March 2007” “arising from” the specified unsecured/converted unsecured credit facilities or exposures. This requires a causation inquiry—i.e., whether the loss can properly be characterised as arising from the relevant credit facility/exposure type, rather than from some other source.
How Is This Legislation Structured?
The Regulations are extremely concise and consist of two provisions:
(1) Regulation 1 sets out the citation and commencement.
(2) Regulation 2 provides the exemption. It is structured as a single operative clause with sub-paragraphs (a) to (c) describing the types of credit facilities/exposures that trigger the exemption, and it includes a definitional limitation tied to the “director group” concept in the Fifth Schedule to the Banking Act.
Because the instrument is short, its legal effect depends almost entirely on the interpretation of the cross-references: section 29(4) and (5) of the Banking Act, and the definition of “director group” in the Fifth Schedule (specifically paragraph (d)(i)). A practitioner should therefore treat this Regulations as a “connector” statute—its value lies in how it modifies the application of the Banking Act’s provisions to a defined set of facts.
Who Does This Legislation Apply To?
The Regulations apply to directors of a bank in Singapore. The exemption is personal to directors (rather than to the bank itself), and it is framed as an exemption from the application of specific statutory provisions in relation to particular losses.
However, the exemption is not automatic for every director or every loss. It applies only where the bank suffers a loss on or after 31 March 2007 and the loss arises from an unsecured credit facility (or a credit facility that later becomes unsecured) or an exposure to a person who is in the bank’s director group by virtue only of the specified limb of the Fifth Schedule definition. Accordingly, the applicability is fact-dependent and requires a structured analysis of (i) the loss date, (ii) the nature of the credit facility/exposure, and (iii) the precise basis for the counterparty’s inclusion in the director group.
Why Is This Legislation Important?
This Regulations is important because it clarifies and limits the reach of section 29(4) and (5) of the Banking Act as it affects directors. In banking compliance and governance, statutory provisions that attach consequences to directors can materially influence board risk management, credit approval processes, and documentation practices—especially where related parties or director-group persons are involved.
By carving out an exemption for losses arising from unsecured credit facilities and exposures to director-group persons (under a narrow definitional basis), the Regulations helps prevent directors from being subject to statutory consequences in circumstances where the underlying risk is tied to a specific type of credit relationship. This can be significant in disputes, regulatory reviews, or internal investigations following credit losses.
From an enforcement and compliance perspective, the Regulations also signals that the legislature is attentive to the interaction between (i) the Banking Act’s director-related provisions and (ii) the definitional architecture of “director group” in the Fifth Schedule. For practitioners advising banks and directors, the key takeaway is that definitional precision matters: the exemption turns on whether the counterparty is a director-group person “by virtue only” of a particular paragraph. In practice, this encourages careful mapping of relationships and robust record-keeping to support the correct classification of counterparties and exposures.
Related Legislation
- Banking Act (Chapter 19) — in particular:
- Section 29(4) and (5) (as modified by the Regulations)
- Section 76A(1) (the enabling provision for making the Regulations)
- Fifth Schedule — definition of “director group”, including paragraph (d)(i)
- Banking Act — Timeline / Legislation history (for versioning and amendment context)
Source Documents
This article provides an overview of the Banking (Exemption from section 29(4) and (5)) Regulations 2009 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.