The Bangko Sentral ng Pilipinas has required thrift, rural and cooperative banks operating digital banking models to meet a ₱1 billion minimum capital floor and adhere to stricter risk management rules.
Under Circular No. 1240, issued Sept. 21, lenders identified by the central bank as functioning like digital banks have six months from notice receipt to comply with the capitalization requirement. The same capital threshold applies to proposed acquisitions intended to transform small lenders into technology-driven operations.
The regulation covers institutions using digital platforms to generate significant loan or deposit growth, as well as those whose risk management systems and capital structures no longer match their official business model.
The central bank said it may also impose additional restrictions on non-compliant institutions, including caps on new digital products, heightened supervisory reporting requirements and mandatory enhancements to risk control systems.
The circular opens a path for qualifying institutions to convert into formally licensed digital banks, subject to regulatory review of their governance, system readiness, resource capabilities and business models. A digital banking license permits institutions to offer services beyond their traditional geographic boundaries.
The Philippines currently has seven licensed digital banks.
This article is published on BitPinas: BSP Imposes ₱1B Capital Requirement on Local Banks Operating Digital Models
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