The Bangko Sentral ng Pilipinas (BSP) expects the country’s first six digital banks will become fully operational in the first six months of this year, according to a high-ranking official.

BSP Deputy Governor Chuchi G. Fonacier said banks that are converting into digital banking operations may start its new business sooner, perhaps within the first three months of 2022.

“We expect to see new digital bank players operating in the market starting mid-2022,” said Fonacier in an email to Manila Bulletin. “With respect to converted banks, we anticipate the shift in their operations under their digital banking licenses by early 2022,” she also said.

For the time being, Fonacier said the BSP is still finalizing some of the regulatory framework for digital banks.

“We have yet to release the next phase of regulations to clarify the supervisory expectations on digital banks in relation to capital and liquidity, corporate and risk governance, and risk management,” she said.

Fonacier reiterated that digital banks are exposed to the same set of risks as regular, brick-and-mortar banks, and are “subjected to the same prudential requirements, standards on corporate governance, risk management guidelines, among others, with due regard to the principle of proportionality.”

However, there are a few more guidelines that BSP will be releasing before the full operation of the new digital banks.

The BSP has only approved six licenses for digital banks and has closed the window for new applications until end-December 2023.

The BSP approved two banks which converted their licenses and four new players,” said Fonacier. “The moratorium on the grant of additional digital bank licenses will allow the BSP to closely monitor the banks’ performance and impact on the banking system including their contribution to enhancing competition and increasing financial inclusion. Nonetheless, the limit on the number of digital bank licenses may be modified or lifted at any point, subject to review and approval of the Monetary Board,” she said.

Meanwhile, the timeframe for new digital banks to commence operations will depend on their readiness and compliance with pre-operating requirements, added Fonacier.

Under existing regulations, applicant banks which have been approved by the Monetary Board are given a year to complete these requirements and commence their banking operations, she said.

A digital bank is the BSP’s seventh bank category. Digital banks will have minimal or zero-reliance on physical touchpoints but it will have to set up one office in the Philippines to receive and address customer complaints or issues.

The BSP has limited the number of digital banks to allow them the space to closely monitor the performance and impact of digital banks to the banking system and their contribution to the financial inclusion agenda.

For now, there will only be six digital banks operating in the Philippines.

These are Overseas Filipino Bank of Land Bank of the Philippines and its license was approved last March 25, 2021. Tonik Bank of Singapore and UNObank of Singapore’s licenses were approved last June 3 while UnionDigital of Union Bank of the Philippines got its license last July 15. The last two digital bank licenses were given to GOtyme of Robinsons Bank Corp. on Aug. 12, and Maya Bank, owned by PayMaya of PLDT Inc. on Sept. 16.