The Bangko Sentral ng Pilipinas (BSP) said Thursday the Monetary Board, its policy-making body, approved the lifting of the moratorium on the grant of new digital banking licenses starting Jan. 1, 2025, allowing four more digital banks to operate in the country.
The central bank said the new licenses, which include converting existing bank licenses to digital ones, would tap the potential of these banks to boost the Philippine financial system while managing risks.
Since issuing the Digital Banking Framework in December 2020, six digital banks have started operating in the Philippines. The moratorium’s lifting will accommodate four more licenses, either for new banks or conversions.
“With this limit, the BSP can closely monitor developments in the digital banking industry, obtain broader perspective as these banks mature further in their operations, as well as assess the impact of the entry of new players on the banking system,” BSP Governor Eli Remolona Jr. said.
The application process for new digital bank licenses will be rigorous, focusing on value propositions, business models, and resource capabilities. Applicants must also meet standard licensing criteria, including transparency of ownership and control, shareholder suitability, fitness of directors and senior management, adequate capital, and a sound corporate governance and risk management plan.
Only applicants demonstrating the ability to meet minimum criteria and offer unique value propositions or develop innovative business models will be granted a license. Applicants should also show the capacity to deploy digital solutions and sustainably grow their business in the Philippines, the BSP said.
“Applicants must bring something new to the table. We want to see unique product and service offerings that are different from that offered by the existing market players. These offerings should have significant potential to reach broader clientele, particularly the untapped or underserved market segments,” Remolona said.
The BSP earlier capped the number of digital bank licenses at six and temporarily closed the application window on Aug. 31, 2021, to monitor the performance and impact of digital banks on the banking sector and evaluate their contribution to the BSP’s digital transformation and financial inclusion goals.
The central bank said the decision to allow new digital banks aligns with its mandate of ensuring financial system stability, promoting financial inclusion, and driving digital transformation.
Be the first to comment