BSP Approves ‘Digital Bank’ as New Category of Bank

Please share and grow the BitPinas community.

December 1, 2020 — The Bangko Sentral ng Pilipinas (BSP) has approved to recognize “digital bank” as a new bank category separate from existing bank categories. This is the seventh bank category in the Philippines.

In a statement, BSP Governor Benjamin Diokno sees digital banks’ important role in promoting market efficiencies and expanding access of Filipinos to financial services. The BSP now targets 50% of all retail transactions to shift to digital by 2023. Additionally, it wants 70% of all adult Filipinos to have transaction accounts by 2023. The move, the governor said, would leapfrog the agency’s financial inclusiveness agenda.

Because digital banks are subject to the same financial risks such as cybersecurity and money laundering risks, they will be subject to the same requirements as other bank types but these requirements will be recalibrated to be in line with these new bank type’s business model and risk profile. Likewise, they must have “sound digital governance, robust, secure and resilient technology infrastructure, and effective data management strategy and practices,” the statement said.

Digital banks must have a principal place of business in the Philippines to house management, operations, and support for customer concerns as well as to have a point of contact with the regulators.

The BSP said they may limit the number of digital banks that can be established depending on the overall banking situation in the country.  “Essentially, the BSP is looking to attract players with strong value proposition, sufficient financial strength, technical expertise of management and effective risk management,” Governor Diokno added. 

The official framework or the approved circular related to digital banks’ establishment has not yet been publicly released. But from a draft circular shared by Regulation Asia, the minimum capital requirement for digital banks is Php 1 billion. “The BSP may subject a digital bank to higher minimum capital requirement and capital ration based on its assessment of the risk profile of the digital bank,” the draft stated

This article is published on BitPinas: BSP Approves ‘Digital Bank’ as New Category of Bank

Please share and grow the BitPinas community.

Join and subscribe to stay up to date
Subscribe
Notify of
guest
8 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

[…] This article is published on BitPinas: BSP Approves ‘Digital Bank’ as New Category of Bank […]

[…] post BSP Approves ‘Digital Bank’ as New Category of Bank appeared first on […]

[…] year, the BSP approved “digital bank” as a new banking category, recognizing this new type of bank’s role in expanding access of Filipinos to financial services. […]

[…] year, the BSP approved “digital bank” as a new banking category, recognizing this new type of bank’s role in expanding access of Filipinos to financial services. […]

[…] year, the BSP approved “digital bank” as a new banking category, recognizing this new type of bank’s role in expanding access of Filipinos to financial services. […]

[…] yr, the BSP approved “digital bank” as a new banking category, recognizing this new sort of financial institution’s position in increasing entry of Filipinos […]

[…] year, the BSP approved “digital bank” as a new banking category, recognizing this new type of bank’s role in expanding access of Filipinos to financial services. […]

[…] to digitize the country’s payments. From the National QR Code Standard to the establishment of “Digital Bank” as a bank category, the central bank has had a very busy […]

Michael Mislos

A business ad graduate from the Pamantasan ng Lungsod ng Maynila, Mike is the website manager of Bitpinas.com. He is responsible for almost every content you see on the site, from topic/news selection to editing of articles. Mike believes correct information about blockchain and cryptocurrency can empower people to make accurate decisions about the industry, which, in turn, should deter bad actors from taking advantage of crypto & blockchain. [Telegram @mikemislos]

Michael Mislos
shares