BSP to issue digital banking rules this month

Published November 23, 2020, 5:30 AM

by Lee C. Chipongian

The guidelines and regulation for a digital banking sector in the Philippines will be ready this month, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.

            “I think it will be issued not later than the end of the month. And then we will soon get the applications for digital bank license,” said Diokno.

            The circular for the establishment of digital banks in the country has “gone through consultation process” in July and in October. “We will soon issue the measures,” he added.

            A number of banks have already expressed intentions or interests to apply for a digital bank license, while some are exploring options to set up a digital bank subsidiary or get a separate license.

            A digital bank is BSP’s seventh bank classification and it will be distinct from the other bank types. For one, digital banks will have minimal or zero-reliance on physical touch points, and two, the BSP will only permit these banks to set up one office to receive and address customer complaints or issues.

            Diokno has said that they will focus on quality versus quantity, when sifting through the applications for digital banking license. The BSP will adopt prudential standards when granting a digital bank authority, he added, and will only entertain applicants that will meet their financial and risk management requirements.

            Diokno said the BSP will want applicants with “strong value proposition, sufficient financial strength, management expertise and excellent risk management” to help them in the “shared goal of onboarding more Filipinos in the financial system.”

            Digital banks will have a minimum P1 billion capitalization and are expected to have cyber resilience to advance the financial sector’s digitalization.

            The BSP will also allow existing banks with traditional brick and mortar branches to convert to digital banks. The circular will include a three-year transitory provision to give existing banks to convert to digital banks after receiving BSP’s approval.

 
CLICK HERE TO SIGN-UP
 

YOU MAY ALSO LIKE

["banking-finance","business","business"]
[2555043,2595965,2595633,2595651,2595625,2595662,2595658]