Restricted-license banks do not have free access to the local market and differ from fully licensed banks in the size of the deposits they are permitted to collect. 1 Offshore banks are limited to wholesale banking services sold to nonresidents. Other significant financial institutions include merchant banks, finance companies, and insurance firms. Singapore's 27 finance companies are active in car and home finance. They have also diversified into leasing and factoring, dealing mainly with small firms and individuals.
Finance companies are subject to a well-developed legal framework and relatively strict regulation.
Through interbank deposits, they play an important role as suppliers of funds to merchant banks, which lack fund-raising capabilities of their own. As of March 1996, there were 146 registered insurance companies in Singapore. Although there are many insurers serving the economy, the market is highly concentrated. Two areas targeted for growth in the future are offshore reinsurance and captive insurance. Direct Finance Singapore's treasury bond market is modeled on the US treasury bond market and involves primary dealers and market makers who tend to be commercial banks.