November 22, 2024 | 12:00am
MANILA, Philippines — Foreign and local financial institutions have expressed growing interest in securing a digital banking license as the Bangko Sentral ng Pilipinas (BSP) prepares to reopen applications next year.
BSP director Melchor Plabasan, who heads the central bank’s Technology Risk and Innovation Supervision Department, said the four slots would be open to both new players and existing financial institutions transitioning from other licenses.
“There are new players that are exploring and are interested in entering the Philippine market, but based on our issuance, we will only start accepting new applicants by Jan. 1, 2025,” Plabasan said.
He said the BSP is currently determining which among digital financial institutions should be considered as operating like a digital bank.
“Because if you’re already behaving like a digital bank, you should be regulated like a digital bank, not a rural bank. That’s why the intention really is to minimize the arbitrage,” he said.
Earlier in August, the BSP said it would lift the moratorium imposed on the granting of digital banking licenses starting Jan. 1, 2025, but will only permit a maximum of 10 digital banks to operate in the country.
According to Plabasan, several foreign and local entities have inquired about legal and regulatory requirements ahead of the application period.
However, he said the BSP would not automatically grant all four licenses. Applicants, whether new or transitioning, must meet stringent requirements, including an initial capital of P1 billion and the ability to offer innovative solutions to the market.
“They need to bring something new to the table,” he said. “We won’t award all four licenses just for the sake of filling the slots. If no applicant meets the additional requirements, then we will stay with the existing number.”
He estimates that the chartering process for new or converted digital banks may take three to four months, assuming all requirements are met. This means approved applicants can potentially launch operations within 2025.
Six digital banks are currently operating in the Philippines since the issuance of the Digital Banking Framework in December 2020.
The BSP previously granted digital banking licenses to Maya Bank, Overseas Filipino Bank Inc., Tonik Digital Bank Inc., UNObank Inc., UnionDigital Bank and GOtyme Bank Corp.
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