Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, recently confirmed that it will no longer be accepting applications for new virtual banks including firms seeking to convert their current status, starting from September 1, 2021.
Virtual banking applications sent to the nation’s reserve bank until August 31, 2021 will reportedly be reviewed on a first come, first served basis.
According to the BSP, these applications will be evaluated for their completeness of documentation and information along with the company’s ability to ensure regulatory compliance with the relevant licensing criteria.
Applicants who don’t meet the BSP’s pre-qualification guidelines/criteria or have incomplete documentation will not be approved and they can’t re-submit for further processing at this time.
After the deadline on August 31, 2021, the BSP will no longer take new or returned applications.
The reserve bank has so far approved the application of five virtual banks, including two incumbent banking institutions, which have both converted their previous licenses to a digital bank permit. These financial service providers include UNObank, Union Digital Bank, and GoTyme.
The Overseas Filipino Bank and Tonik converted their existing licenses to virtual banking permits.
BSP stated that it’s presently reviewing two other virtual bank applications.
Benjamin E. Diokno, Governor of BSP, stated:
“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. 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 Philippines and other Southeast Asian countries like Malaysia, Thailand, Singapore, and Indonesia have been expanding their digital financial services sector at a rapid pace. Virtual banks are being launched across Southeast Asia to meet growing consumer demand for digital-only services such as e-commerce, cross-border transactions, and various other business use-cases.
The pace of digital transformation has accelerated following the global COVID-19 outbreak. Hong Kong has also been one of the most active countries in the region with its eight virtual banks now offering a wide range of financial services.