MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) will impose a P1-billion minimum capital for new digital banks as it promotes an enabling regulatory environment for the digitalization of the financial industry.
The BSP is looking at a higher minimum capital requirement and capital ratio based on its assessment of a bank’s risk profile.
In an earlier proposal, a basic digital bank is required a minimum capital requirement of P400 million to perform services such as accepting savings deposits, time deposits, foreign currency deposits, as well as the grant of unsecured loans, collect and pay for the account of others, provide remittance and bills payment services and issue electronic money products.
The BSP was also earlier looking at a minimum capital requirement of P900 million for an advance digital bank to provide all the services of a basic digital bank, as well as grant secured loans, issue credit cards, and other activities.
The regulator intends to include digital banks as a distinct classification of banks that include universal banks, commercial banks, thrift banks, rural banks, cooperative banks and Islamic banks.
A digital bank will be subject to the prudential requirements on corporate governance and risk management, particularly on information technology and cybersecurity, outsourcing, consumer protection and anti-money laundering and terrorism financing, as provided under existing regulations, with due regard to the application of the principle of proportionality.
It is also expected to primarily conduct its business using a digital platform and electronic channels. It is not allowed to establish a branch or branch-lite unit.
Digital banks may likewise offer financial products and services through cash agents and other delivery partners. They are required to maintain a principal or head office in the Philippines to serve as the main point of contact for stakeholders, as well as provide a venue for interfacing with the BSP.
The BSP said an existing bank may apply for conversion to a digital bank and would be given a longer period of three years to meet the minimum capital requirement and implement the transition plan, including divestment or closure of branches or branch-lite units.
In the case of an existing bank with up to 60 percent of its voting stock held by a foreign individual or non-bank corporation, such stockholding may be retained or reduced, but once reduced, shall not be increased thereafter beyond 40 percent of the voting stock.