THE Bangko Sentral ng Pilipinas (BSP) announced on Wednesday that it has approved the second set of guidelines for digital banks.
This follows the release of the digital bank framework in December 2020.
According to the Central Bank’s statement, the approved guidelines lays down BSP’s supervisory expectations on corporate and risk governance of digital banks as well as the applicable prudential regulations on capital, leverage, and liquidity.
The guidelines will also prescribe the prudential limits on equity investments in allied undertakings, required reserves against deposit and deposit substitute liabilities, and reporting requirements of digital banks.
Digital banks are financial institutions that have minimal or zero-reliance on physical touchpoints as their products and services are processed end-to-end through digital platforms or electronic channels.
“Due to its nationwide market reach resulting from the use of digital platforms or mobile applications in the banking services delivery, and ability to rapidly expand operations, this category of banks is considered as complex banks,” the BSP said.
“Consistent with this, the governance expectations, Basel III standards, and prudential reporting requirements applicable to universal and commercial banks shall also apply to digital banks,” it added.
BSP Governor Felipe Medalla said the new set of guidelines is part of the BSP’s commitment to providing Filipinos with access to digital banking in a safe and reliable environment.
“The prudential requirements for digital banks will strengthen the resilience of this new bank category to better absorb financial shocks and promote financial stability,” Medalla said.
The new rules provide that the BSP may require existing thrift, rural and cooperative banks to maintain a minimum capital of P1 billion if said banks primarily offer financial products and services that are processed end-to-end through a digital platform and/or electronic channels similar to digital banks.
“This is to ensure that banks maintain sufficient capital to cover the risks that they assume. It also provides a level playing field among banks that leverage on digital platforms in delivering their financial products and services. Banks concerned shall be given ample time to build up capital and meet the new minimum capital requirement,” the BSP said.
The BSP has authorized six digital banks to operate in the Philippines, namely GoTyme Bank Corporation, Maya Bank, Inc., Tonik Digital Bank, Inc., UnionDigital Bank, Inc., UNObank, Inc. and Overseas Filipino Bank, Inc., A Digital Bank of LANDBANK.
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