THE pace of growth of digital banking hits a snag after monetary authorities decided to close the window for the application of new digital banks in the country starting September 1.
The Bangko Sentral ng Pilipinas (BSP) said the monetary board believes the closure of the application will help them maintain a stable and competitive environment for these new digital banks.
“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,” BSP Governor Benjamin E. Diokno said.
“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,” Diokno added.
Just this week, Singapore-headquartered Tyme Ltd. said it secured BSP approval for TymeBank’s GOTyme, a digital banking application set to launch next year.
To date, the Monetary Board has given approval to two incumbent banks, which have converted their existing licenses to a digital bank license. These include Singapore-based DigibankASIA Pte Ltd, “UNObank” brand and Union Bank of the Philippines’s UnionDigital Bank. Meanwhile, Overseas Filipino Bank Inc. and Tonik Digital Bank Inc. are banks that converted their existing licenses to digital banks.
The BSP said digital bank applications that are received by the BSP until August 31 will be processed on a first-come, first-served basis and will be assessed for completeness and sufficiency of documentation, information and 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.
Meanwhile, applications received on or before August 31 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.
By September 1, the BSP will no longer entertain nor accept new or returned applications, the central bank said.