MANILA: The Bangko Sentral ng Pilipinas (BSP) on Thursday announced that it has lifted the moratorium on issuing new digital banking licenses.
Starting Jan. 1, 2025, the BSP will resume granting licenses to digital banks. However, the central bank will only accommodate four licenses as it only limits a maximum of 10 digital banks to operate in the country.
‘With this limit, the BSP can closely monitor developments in the digital banking industry, obtain broader perspective as these banks mature further in their operations, as well as assess the impact of the entry of new players on the banking system,’ BSP Governor Eli Remolona Jr. said in a statement.
For the four remaining slots, the BSP allows the conversion of an existing bank license to digital bank licenses to continuously leverage on the potential of these banks in bringing positive impacts to the domestic financial system while being mindful of the associated risks.
‘Applicants must bring something new to the table. We want to see unique product a
nd service offerings that are different from that offered by the existing market players. These offerings should have significant potential to reach broader clientele, particularly the untapped or underserved market segments,’ Remolona added.
According to the BSP, new digital bank candidates will undergo a thorough licensing procedure. This will assess their business proposals, operational models, and financial capabilities.
Aside from meeting the standard licensing requirements, which involve scrutinizing ownership transparency, shareholder suitability, and the competence of management, applicants must demonstrate unique value propositions or innovative business models not currently available in the market. Only those capable of meeting these criteria and showing readiness to implement digital solutions and grow sustainably in the Philippines will be granted a digital banking license.
Remolona said the new licenses will be granted to applicants that will satisfy the objectives of the Digital Banking Frame
work –promoting wider adoption and utilization of digital financial services in the country and expanding their reach to the unserved and underserved segments of the society.
In August 2021, the central bank issued a moratorium on granting new licenses to digital banks to monitor their performance and impact on the banking sector, as well as to evaluate their contribution to BSP’s digital transformation and financial inclusion agenda.
Six digital banks were granted with licenses, including GoTyme Bank, Maya Bank, Overseas Filipino Bank, UnionDigital Bank, UNObank, and Tonik Digital Bank.
Source : Philippines News agency
