MAS urges tougher bank action against clients breaching environmental laws
Possible responses include curbing exposure or ending client relationships, while banks are expected to examine customers’ potential involvement in haze.
Singapore’s banks should strengthen their response to clear violations of environmental laws by customers, the Monetary Authority of Singapore (MAS) said on 28 October. Such action could include reducing exposure to those customers or ending relationships with them.
For customers potentially connected to haze-producing activities, MAS said lenders should seek enough information to establish their involvement. Banks should also examine whether customers have adequate arrangements for fire prevention, detection and suppression.
The regulator expects banks to identify and evaluate material environmental risks stemming from their activities and exposures, and to manage and monitor those risks. Pollution and deforestation are among the risks covered. Relevant information published by the National Environment Agency under the Transboundary Haze Pollution Act should inform that work.
MAS said responses to heightened risks may involve adding financing conditions, reconsidering financing terms, restricting further exposure or reviewing whether a customer relationship should continue. It backed local banks’ opposition to burning practices and noted their willingness to act where warranted.
The authority said it had reinforced its expectations with banks amid the haze situation. Its supervisory expectations are detailed in environmental risk management guidelines issued in 2020 and transition planning guidelines issued in March 2026.
The 2020 guidelines call for enhanced checks on higher-risk transactions, potentially including customer site visits and separate reviews by environmental specialists. They also say banks should disclose how they manage environmental risks at least annually.
