A merchant bank normally specialises in one or a few of these services. At the end of 1998, there were 74 merchant banks in Singapore. The operations of merchant banks in the Asian Dollar Market are governed by the same terms and conditions as those of commercial banks. The statutory liquidity is 13 per cent. Prior to December 1998, the minimum cash reserve and statutory liquidity requirement were 6 per cent and 10 per cent respectively.
Finance companies operate along the same lines as commercial banks.
They engage mainly in the provision of housing loans, hire-purchase finance of motor vehicles and consumer durable goods, and loans to small industries and businesses. At the end of 1998, there were 17 finance companies in Singapore. The total assets and liabilities of finance companies dropped by 1.2 per cent as at December 1998 while loans to non-bank customers declined by 6.3 per cent. Deposits with finance companies dropped by 1.7 per cent at end December 1998 compared with an increase of 3.6 per cent in 1997.