COVID-19 liquidity relief packages offered by DBS

DBS on April 3rd announced that it will introduce a third round of liquidity relief measures to help individuals and SMEs impacted by the COVID-19 pandemic. These COVID-19 liquidity relief packages closely follow the guidelines as set out in the relief package for borrowers announced by the Monetary Authority of Singapore on 31 March 2020.

For individuals: Deferred mortgage repayment and lower interest on unsecured credit

Retail customers will be able to defer their home loan principal and interest payments till December 2020 and at the same time, avoid late payment interest with no impact to their Credit Bureau records.

Those with outstanding balances accrued on credit cards and/or DBS Cashline can also apply to convert their balances into a term loan of up to five years, with effective interest rate capped at 7.96%, and no penalty for early repayment.

These latest relief measures are in addition to earlier ones rolled out by the bank to individuals in February 2020, to a strong response:

• Free 30-day COVID-19 relief insurance coverage in partnership with Chubb Insurance Singapore Limited: some one million customers and their family members have since signed up
• Six-month principal repayment moratorium for mortgage loans: applications have been received from more than 900 customers
• Contact tracing for customers who use their cards for street hail fares with ComfortDelGro via the ‘TRACE’ promo code which offers a SGD 2 discount: around 20,000 redemptions have been made to date
• Free online supplementary classes in partnership with 88Tuition, for primary and secondary school students: more than 460 students have benefitted

Going above and beyond government measures to help SMEs alleviate cashflow woes

DBS has amped up its cash flow support for SMEs through its Digital Business Loan, which has seen healthy interest since its launch on 26 February 2020. From 6 April 2020, SMEs can apply online for a collateral-free loan of up to SGD 100,000, double the previous quantum of SGD 50,000. This will grant SMEs hassle-free access to additional working capital to weather the economic storm. Further, SME clients will only need to service interest for the first 12 months, up from the original three-month interest servicing period announced on 26 February 2020. DBS will go one step further to support SMEs and waive all processing fees, usually pegged at 1% of the loan quantum associated with this loan.

Additionally, SMEs refinancing their commercial property loans with the bank from mid-April 2020 will enjoy a nine-month principal repayment moratorium, subject to meeting certain eligibility criteria. This means that customers will only need to service interest during these nine months, affording SMEs greater cash flow flexibility.

The processing fee waiver for the upsized Digital Business Loan and nine-month principal repayment moratorium for refinanced commercial property loans are above and beyond government relief measures that were announced on 31 March 2020 which DBS will be introducing on 6 April 2020. These include allowing SMEs banking with DBS to choose to defer principal payments on all secured term loans up to 31 December 2020, subject to eligibility. SMEs will also be able to extend the tenure of their loans by up to the corresponding principal deferment period if they wish. This relief will be available to SMEs that are not more than 90 days past due as of 6 April 2020.

These are in addition to earlier announced DBS relief measures for SMEs:

• Six-month principal repayment moratorium for SME property loans
• Extension of import facilities of up to 60 days to act as immediate cash flow support
• F&B Digital Relief Package supported by the Infocomm Media Development Authority and Enterprise Singapore that features e-commerce and digital marketing solutions to help SMEs tap new income streams by building their online presence in just three days

Said DBS Singapore Country Head Shee Tse Koon: “We remain steadfast in our commitment to standing by our customers and believe that our new round of liquidity relief measures will help alleviate some of the challenges individuals may face in managing their cash flows. We are also providing SMEs with swift, hassle-free access to additional working capital. 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.”

To obtain more information on DBS’ latest COVID-19 liquidity relief packages from 6 April 2020 onwards, retail customers can visit https://www.dbs.com.sg/personal/support-covid-community.

Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “at this very difficult time, assistance schemes, especially to amp up cash flow for SMEs are very important. The timely and broad-based help they get will determine if the companies die or emerge stronger after this crisis ends.”

He added, “I am happy that DBS remains steadfast in its commitment to standing by its customers and believes that their new round of liquidity relief measures will help alleviate some of the challenges individuals may face in managing their cash flows.”