The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued draft guidance for the establishment of digital banks in the country.
Under this guidance, digital banks are not allowed to establish physical branches for banking operations other than customer service.
Go deeper with GlobalData
Digital banks will be classified as a basic digital bank or an advance digital bank.
A basic digital bank will be allowed to accept savings, time, and foreign currency deposits.
It will also be able to grant unsecured loans, provide remittance and bill payment services and issue e-money products.
An advance digital bank will also be able to perform these activities and additionally, it will be allowed to issue credit cards to its customers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataBoth types of digital banks can offer these products and services to their retail and MSME customers.
Moreover, a basic digital bank should have a minimum capital requirement of PHP400m ($81.05m), while an advance digital bank should have a minimum capital requirement of PHP900m ($182.4m).
Any foreign non-bank can own up to 40% stake in the digital bank incorporated in the Philippines while a foreign bank can own up to 100%.
The banks eligible to be established as a digital bank will be given two years of grace period to meet the minimum capital requirements.
In the draft guidance, BSP governor Benjamin Diokno said: “Digital platforms play a pivotal role in promoting efficient delivery of financial products and services and in reaching the unserved and underserved market.
“In this light, the BSP endeavours to promote an enabling regulatory environment that allows responsible innovation to flourish promotes cyber resilience, and contributes to advancing the digitalisation of the financial industry.”
BSP has included digital banks as the distinct classification of banks as they play a major role in developing and launching financial products and services through digital channels.
It has included universal banks, commercial banks, thrift banks, rural banks, cooperative banks and Islamic banks under its regulatory framework.
