End of 'Old Boys Club' for Singapore Banks?

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Following the move by Singapore's central bank to censure 20 banks over alleged rate-rigging, industry participants warn the incident marks the demise of the 'old boys' club' banking culture that has dominated the city state in the past.

The development is the latest in a string of similar rate-rigging scandals to have scathed global investment banks in recent times, the first involving British bank Barclays in June last year, then later UBS and the Royal Bank of Scotland .

(Read More: Singapore Punishes 20 Banks in Benchmark Rate Review)

Now Singapore-based bankers say the incidents have dramatically transformed banking culture in the country.

"All I can say is that at the Royal Bank of Scotland, the culture has been dramatically affected by this whole episode, and I'm sure it's not just us," said Gregg Gibbs, currency strategist at RBS, referring to other affected banks. "These events have changed the way banks think and act, every employee has been put on notice," he added.

On Friday, the results of a probe by the Monetary Authority of Singapore (MAS) censured 20 banks and highlighted 133 traders who have tried to inappropriately influence key borrowing and currency rates. Three quarters of the traders have been fired or resigned, the regulator said.

High profile banks including ING, Bank of America, together with Australian banks ANZ and Macquarie were implicated in the scandal. No fines were issued but the watchdog ordered the lenders to set aside additional reserves of $S12 billion ($9.5 billion) pending steps on how to improve internal reforms on benchmark setting. The money will be returned if the banks take the required remedial action.

Other banks censured included BNP Paribas, Bank of America, Oversea-Chinese Banking Corporation, Barclays, Credit Suisse, DBS, Deutsche Bank and Standard Chartered. The regulator first began the review of benchmark borrowing rates nearly a year ago.

Seng Wun Song, regional economist at CIMB Bank, said the incident has marked the end of the 'old boys' club' culture in the Singapore banking sector.

"Singapore has a relatively small banking community, and the key players are very familiar with each other. This closer scrutiny means that the culture of the old boys' club is now a thing of the past," said Song. "The banks will now always be looking over the shoulders of these guys at their desks," he added.

However, Song said the development was positive, and an inevitable transition towards making banking fairer and more transparent.

"The regulator is recognizing that there is an atmosphere of collusion, although they cannot prove it; they are saying now we will be watchful... these transactions have to be market driven rather than [via] the efforts of some individuals. This is fairer to all market participants," he said.