BSP receives first application for a digital banking license

THE BANGKO SENTRAL ng Pilipinas (BSP) has received the first application for a digital banking license following the release of a framework for the sector in November.

“The application is a partnership of local and foreign players, ”BSP Deputy Governor Chuchi G. Fonacier said in a Viber message.

Aside from the first applicant, Ms. Fonacier said there are four  more parties that have expressed interest in applying for a digital bank license.

“Initially, the MB (Monetary Board) has set a limit of five digital banking licenses,” she added.

BSP Governor Benjamin E. Diokno on Tuesday said they will assess applicants in a first come first serve basis.

“We will closely monitor the number of digital banking licenses issued, considering the overall banking situation and the risks posed by these banks to the industry and the quality of prospective clients,” Mr. Diokno said in an interview with ABS- CBN News Channel on Monday.

The central bank in November approved a regulatory framework for digital banks, which sets it apart from other lender classifications such as universal, commercial, thrift, rural, cooperative, and Islamic banks.

Under BSP Circular No. 1105 issued in December, interested  parties seeking to apply for a digital banking license need to put up a minimum capital of P 1billion to establish their presence in  the country.  The framework also allows currently established brick and mortar lenders to convert to digital banks.

Digital banks will likewise be distinguished for having all-online  customer processes and transactions while only maintaining a main office for management, support operation, and as point of contact for regulators.

CIMB Bank Philippines, Inc. and ING Bank N.V. Manila are currently offering online-only retail banking services and have been enticing the market through higher interest rates than what traditional banks offer.  EastWest Banking Corp. unit Komo and the Diskartech App of Rizal Commercial Banking Corp. are also offering similar services.

Mr. Diokno has said they see digital banks helping expand Filipinos’ access to financial services.

He said these lenders can help the central bank reach its goal to bring 70% of the country’s adult population into the financial system and to have at least 50% of payments, both in volume and value, done digitally by 2023.—LuzWendyT.Noble