The Monetary Authority of Singapore will phase in a borrowing limit on unsecured credit facilities over four years to give affected borrowers more time to reduce their debts.

The regulator announced in September 2013 that it planned to prohibit financial institutions from granting further unsecured credit to borrowers whose outstanding unsecured debts across all financial institutions exceed 12 times their monthly incomes for three consecutive months. The rule aims to stop people from accumulating excessive debt. It will phase in the borrowing limit over four years:

• 24 times monthly income from 1 June 2015;
• 18 times monthly income from 1 June 2017; and
• 12 times monthly income from 1 June 2019.

Financial institutions will not be allowed to grant further unsecured credit to anyone whose unsecured borrowings exceed the prevailing borrowing limit for three consecutive months.