MAS enforces a phased capital build-up with ongoing risk-based adequacy requirements under Notice 637.

MAS mandates a minimum paid-up capital of S$1.5 billion for digital full bank licenses and S$100 million for digital wholesale licenses, with a phased transition and ongoing capital adequacy obligations under Basel III. These requirements, embedded in the Banking Act and MAS Notice 637, define the capital floor for Singapore's digital banking entrants and distinguish between the two license tiers by a factor of 15.

Minimum Paid-Up Capital Requirements for Digital Bank Licenses

The Monetary Authority of Singapore (MAS) establishes a two-tier minimum paid-up capital structure for digital bank licenses, diverging significantly between digital full banks (DFBs) and digital wholesale banks (DWBs).

For digital full banks, the long-term requirement is S$1.5 billion in minimum paid-up capital, which DFBs must reach by their fifth year of operations to achieve full-functioning status, according to MAS FAQ guidance (Q38). In the initial stage, however, DFBs operate under a substantially lower threshold of S$15 million—a 100:1 ratio relative to the eventual requirement—while subject to restrictions including caps on aggregate deposits and limits on permissible activities such as structured notes and proprietary trading (Sidley Austin LLP, 2019).

Digital wholesale banks face a minimum paid-up capital of S$100 million (Sidley Austin LLP, 2019). DWBs are not permitted to accept Singapore dollar deposits from individuals except for fixed deposits of at least S$250,000, though they may take deposits from SMEs and corporates (Sidley Austin LLP, 2019). This S$100 million requirement is consistent with the minimum capital standard for existing wholesale banks in Singapore.

Applicants for either license type are not required to hold the full capital at the point of application. MAS instead expects applicants to demonstrate "firm and ready source(s) of funds, such as commitment from shareholders," which must be furnished to MAS at application (MAS FAQ, Q12). DFB applicants must additionally show "a reasonable plan to build up the S$1.5 billion of capital required to become a full functioning DFB" (MAS FAQ, Q12).

All successful applicants receive an In-Principle Approval (IPA) letter and have up to 12 months to comply with conditions, including meeting the applicable minimum paid-up capital (MAS FAQ, Q13).

Minimum Paid-Up Capital (S$ million) (S$ million)Source: Orionmano Industries

Phased Implementation and Transition to Full Functionality

MAS enforces a staged capital build-up for DFBs, with the transition from Stage 1 to Stage 2 being gradual. During Stage 1, DFBs operate with the S$15 million minimum capital and face business limitations, including caps on aggregate deposits. As DFBs expand services, MAS may impose "progressively higher caps on deposits and minimum paid-up capital" (Sidley Austin LLP, 2019).

The critical milestone is the fifth year of operations, by which MAS expects DFBs to meet the S$1.5 billion capital requirement and become "full-functioning" (MAS FAQ, Q38). However, MAS has shown flexibility: it is open to applications that project a longer runway to meet the S$1.5 billion threshold, provided the applicant submits detailed financial projections and business plans (MAS FAQ, Q38). The regulator notes it will view an earlier break-even year favourably in such cases (MAS FAQ, Q38).

MAS evaluates several factors before approving transition from first to second stage, including: business and financial performance; quality of loans, products, and customer service; ability to serve identified customer segments; and risk management capabilities (Sidley Austin LLP, 2019). This staged approach allows DFBs to prove their business models before taking on the full capital burden.

Risk-Based Capital Adequacy Under Basel III

Beyond minimum paid-up capital, all digital banks—both DFBs and DWBs—must comply with the risk-based capital adequacy requirements in MAS Notice 637, which implements Basel III standards (MAS FAQ, Q11; MAS Notice 637). Notice 637 applies to all locally-incorporated banks and sets out the framework for calculating capital adequacy ratios, including minimum CET1, Tier 1, and total capital requirements.

Banks are required to meet the minimum capital funds requirement on an ongoing basis (MAS FAQ, Q11). MAS explicitly notes that if a digital bank "were to incur losses and breach the minimum capital funds requirement, it would need to raise additional capital to comply with this requirement" (MAS FAQ, Q11). This ongoing obligation exists separately from the initial minimum paid-up capital requirement set out in section 9 of the Banking Act.

MAS Notice 637 has undergone periodic revisions to stay aligned with evolving Basel III standards. Notable amendments came into effect on 31 December 2025 and 1 January 2026 (MAS Notice 637 amendment notes). These updates reflect the continuing regulatory evolution that digital banks must navigate as they scale operations in Singapore.

The sector-level capital requirements for domestic bank licenses and wholesale bank licenses align with this framework. For domestic banks, MAS requires S$1.5 billion minimum paid-up capital, and for wholesale banks, S$200 million, with a minimum capital adequacy ratio of 8% under Basel III.

Outlook

As Singapore's digital banking sector matures, further MAS revisions to capital requirements and Basel III implementation are expected, particularly around the transition of DFBs to full-functioning status and potential adjustments for wholesale banks. The phased capital build-up for DFBs means the first cohort of digital banks—GXS Bank, MariBank, Trust Bank, and others—face the S$1.5 billion requirement by approximately 2027-2028, depending on their start dates. MAS's openness to longer runways for some business models suggests potential for differentiated timelines based on performance and risk profiles. Meanwhile, ongoing amendments to Notice 637 indicate that the capital adequacy framework will continue tightening in line with international standards.