BSP to close application window for new digital banks starting August 31, 2021

The Bangko Sentral ng Pilipinas (BSP) Monetary Board has announced that it will close the window for the submission of applications from new digital banks, including converting banks, starting August 31, 2021.

The BSP said that the closing of submission of application is in line with the overall thrust of maintaining a stable and competitive environment for banks. Manila Bulletin reported that the window will be closed until 2024 or a period of three years.

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. While 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. Meanwhile, the BSP is currently processing two other digital bank applications.

The BSP said that digital bank applications that are received by the BSP until August 31, 2021, will be processed on a first-come, first-served basis and will be assessed for completeness and sufficiency of documentation/information as well as compliance with the licensing criteria on the establishment of digital banks. Applicants that are able to submit the complete documentation on or before the said closure date will be processed by the BSP.

The applications received on or before August 31, 2021, with noted documentary deficiencies or which do not meet the BSP’s pre-qualification 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 August 31, 2021, the BSP will no longer entertain nor accept new or returned applications.

“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,” said BSP Governor Benjamin E. Diokno. “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,” the Governor added.

“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,” BSP Governor Diokno explained.