The Bangko Sentral ng Pilipinas (BSP) has once against reiterated that any bank wishing to offer financial products and services through a digital platform and electronic channels must first secure its approval.
In a memorandum circular, the BSP clarified that a universal bank, commercial bank or thrift bank, rural and cooperative bank and Islamic bank can not market itself as a digital bank when it does not meet any of the requirements of an online-only bank. BSP Deputy Governor Chuchi G. Fonacier said the bank should first secure the “requisite” central bank license on electronic payment and financial services for digital banking products or services.
Fonacier clarified that a bank with a digital-centric business model and operating as such based on BSP’s relevant rules and regulations may market itself as a bank offering digital banking products and services provided it has a license to conduct or transact electronic payments. The BSP defines a digital bank as a bank which offers financial products and services that are processed end-to-end through a digital platform and/or electronic channels with no physical branch/sub-branch or branch-lite unit offering the same.
Fonacier noted that certain banks belonging to other categories use the phrase ‘digital bank’ in their marketing channels even if these banks do not fall under the definition of a digital bank. Only a bank that is granted the license to operate as a digital bank may represent itself to the public as such in connection with its business name,” Fonacier said.
The BSP has capped the number of digital banks to six for now after the nine applicants failed to meet the requirements. The six include Overseas Filipino Bank of Land Bank of the Philippines, Tonik Bank of Singapore, UNObank of Singapore, UnionDigital of Union Bank of the Philippines, GOtyme of Robinsons Bank Corp. and PLDT Group’s Maya Bank.
Of the six, only OF Bank and Tonik Bank are already operating. The others are expected to come online within six months or less.