Coverage
The new requirements will apply to banks that fall under either of two conditions. The first covers banks operating under a business model similar to that of a digital bank, or those whose risk management systems and capital are “no longer commensurate with their official business model and risk profile.”
The second covers banks using digital platforms to deliver services while recording significant growth in their loan or deposit balances.
For proposed acquisitions intended to transform a thrift, rural or cooperative bank into a technology-driven business model, the BSP will require the P1-billion minimum capital at the time of application.
The bank must also comply with prudential standards applicable to digital banks.
Beyond the capital requirement, the BSP may impose additional measures, including enhanced supervisory reporting, restrictions on certain activities or new digital products and services, and strengthened risk management and control systems.
The circular also allows the BSP to issue additional digital bank licenses, including through the conversion of existing thrift, rural and cooperative banks, subject to the applicable licensing framework.
