The Bangko Sentral ng Pilipinas (BSP) is raising the bar for traditional banks going digital, requiring some thrift, rural and cooperative banks to hold at least P1 billion in capital.
Under Circular 1240, the BSP may impose the same rules used for licensed digital banks when a traditional lender’s operations increasingly resemble a digital bank.
Banks covered by the rule will have six months from receiving notice to meet the P1-billion capital requirement and put additional safeguards in place.
The central bank may intervene when a bank’s loans or deposits increase by more than 30% for two consecutive quarters.
Depending on the risks, the BSP may require more capital, tighter reporting and stronger controls, including automated anti-money laundering systems and real-time fraud monitoring.
It may also restrict some activities or stop banks from launching or marketing new digital products and services.
The rules also cover acquisitions to convert an existing thrift, rural or cooperative bank into a digital lender. The P1-billion capital requirement must be met when the bank files its application.
The BSP said it remains open to issuing more digital bank licenses, including through conversions of existing banks.
Applications will be assessed based on the bank’s business model, governance, risk management, financial and operational capacity, and technology.
The Philippines currently has seven licensed digital banks. Circular 1240 will take effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.
