International-Business-Dr-R-Chandran-E-book

(ACUs).
These are
operational
units whose
function is to
conduct
business in
the Asia
Dollar
market. ACU
may also be
operated by
onshore
commercial
banks and
merchant
banks. In
these cases,
ACUs are
distinct
accounting
entities
separately
licensed by
the Monetary
Authority of
Singapore
(MAS)
ACUs accept
deposits and
make loans
in foreign
currencies
and are
prohibited
from doing
business
denominated
in Singapore
dollars. They
(normally 6
percent) the
minimum
liquid asset
ratio
(normally not
less than 18
percent)
limitations on
investments,
limitation on
acquisition of
immovable
property and
some of the
limitations on
credit
facilities
(limits to a
single
borrower and
related party
or parties)
Foreign
ACUs are
required to
provide a
guarantee
from their
parent
institutions
ensuring
liquidity on
demand to
the ACU
should it run
into
difficulties.
ACUs are
required to
79
International Business- Dr. R. Chandran
percent).
There is no
withholding
or income tax
on non
resident
ACUs
depositors.
are carried out
on a regular
basis. There is
no formal
deposit
insurance
scheme. The
MAS has
ability to act
as lender of
lasat resort,
but not an
obligation to
do so. In 1996,
the Banking
Act was
amended to
allow foreign
regulators to
inspect the
Singaporean
branches of
banks under
their
oversight.
Only for Private Circulation