Bangko Sentral to Reopen Digital Bank Applications If Needed
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno announced the possibility to reopen the window for digital bank license applications if additional neobanks are needed.
By Nath Cajuday
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno announced the possibility to reopen the window for digital bank license applications if additional neobanks are needed.
“Maybe we will assess this on a yearly basis on whether there is a need to reopen,” Diokno said while emphasizing that the central bank can reopen the application within a year, or two, or three, depending on the BSP’s evaluation.
Nine months ago, the BSP approved the addition of digital bank as a new bank category. This is the country’s seventh bank category.
Furthermore, after BSP’s recognition to digital bank, it opened the license applications and has already granted six digital banks, namely: Overseas Filipino Bank of Land Bank of the Philippines (March 25, 2021); Tonik Bank of Singapore (June 3, 2021); UNObank of Singapore (June 3, 2021); UnionDigital of Union Bank of the Philippines (July 15, 2021): GOtyme of Robinsons Bank Corp. (August 12, 2021); and Maya Bank, owned by PayMaya of PLDT Inc. (September 16, 2021).
However, Diokno announced last month that the Monetary Board’s decision is to only have seven digital banks for the next three years – so that BSP can monitor and gain the experience in the supervision of digital banks.
The BSP, on the other note, will no longer accept new applicants for digital bank licenses until end- December 2024.
Diokno previously asserted that seven is already an enough number of digital banks for the Philippine market, but opened the possibility of lifting the moratorium on digital bank license applications once a need for additional digital banks will be considered.
One of the digital banking rules is the requirement that one of its directors should have a background in IT or e-commerce, and that one of the senior officers is also an IT or e-commerce expert.
This is the main difference of a neobank to other banks, that despite not having a formal license on digital banking, “more or less” operates as digital banks.
Diokno said a digital bank’s capitalization requirement “is not trivial” since it will need P1 billion to get a neobank license.
Digital banks are expected to help the central bank to reach its goal to attract 70% of Filipino adults into the banked population, and 50% of the payments be done online by the year 2023.
The new digital banks have three years to actually operate as a digital bank. Some of the six banks will operate within a year while two are already up and running such as OF Bank and Tonik Bank.
This article is published on BitPinas: Bangko Sentral to Reopen Digital Bank Applications If Needed
