The central bank will shut the door to new digital banks in the Philippine market for at least three years to preserve a level of competition and quality of service among players while allowing regulators to learn more from this relatively new banking phenomenon. Thus said Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno as he announced on Thursday that the Monetary Board decided to close the window for the submission of applications from new digital banks, including converting banks, by Aug. 31.
Quality of service
“The closure of the application window will allow the BSP to monitor the performance and impact of digital banks on the banking system and their contribution to the financial inclusion agenda,” he said in an online briefing.
“We need to ensure that the business environment continues to allow healthy competition among banks enabling them to offer innovative and competitive financial products and services to their clients,” he added.
Digital bank applications that are received by the BSP until the end of this month will be processed on a first-come, first-served basis and will be assessed for completeness and sufficiency of documentation or information, as well as compliance with the licensing criteria on the establishment of digital banks. Aug. 31 deadline
Applicants that are able to submit the complete documentation on or before the closure date will be processed by the BSP.
However, applications received on or before Aug. 31, 2021 with noted documentary deficiencies or which do not meet the BSP’s prequalification criteria will be returned and will not be subject to further processing. The organizers will be informed that their applications will be deemed closed. After this date, the BSP will no longer entertain nor accept new or returned applications.5 approved so far
To date, the Monetary Board has already approved the application of five digital banks, including two incumbent banks which have converted their existing licenses to a digital bank license. These include UNObank, UnionDigital Bank and GoTyme. Overseas Filipino Bank Inc. and Tonik Bank are banks that converted their existing license to digital banks.
The Monetary Board approval corresponds to the first of the three-stage licensing process. The BSP is currently processing two other digital bank applications.
“As these tech-savvy, customer-centric players introduce innovations in the banking sector, we are confident that the BSP is on track to achieving its digitalization and financial inclusion goals,” Diokno said.