Regulator aligns risk standards with surge in online banking activity
The Bangko Sentral ng Pilipinas (BSP) is raising the capital bar for traditional banks with highly digital operations, setting the minimum at P1 billion for those transacting at least 75 percent of their deposits and loans through digital channels.
Under a draft circular issued Tuesday, the BSP said the new rules will apply to thrift, rural, and cooperative banks that fall under a digital-centric classification — part of a broader push to align regulatory oversight with operational risk and market innovation.
BSP Governor Eli Remolona Jr. said the revised prudential standards are designed to reflect the complexity and exposure of banks shifting heavily to online platforms.
“These progressive requirements aim to foster innovation while ensuring the safety and soundness of the banking system,” Remolona said. “It also promotes fair competition as traditional players evolve alongside fully digital banks.”
The proposed framework introduces a three-tier classification for banks based on digital penetration:
• Tier 3 banks — those with at least 75 percent of deposit or loan customers onboarded through digital channels, and 75 percent of transactions done via electronic financial services — must maintain a minimum capital of P1 billion.
These banks must also comply with Basel III Leverage Ratio rules, adopt advanced anti-money laundering (AML) systems, implement real-time fraud detection tools, and may apply for conversion to full digital bank status.
• Tier 2 covers banks with 50–74 percent digital engagement. Minimum capital: P600 million for thrift banks, P500 million for rural and cooperative banks.
• Tier 1 includes institutions with basic digital capability — such as e-KYC onboarding and online deposits — and at least 30 percent of their deposits or loans sourced digitally. They must hold at least P200 million in capital.
Prudential requirements for Tier 1 and Tier 2 mirror those of Tier 3 but are adjusted based on risk profile, size, and operational complexity.
Electronic transactions considered under this classification include online fund transfers, e-loan disbursements, digital POS activity, bills payments, and mobile load purchases.
BSP Deputy Governor Chuchi Fonacier said it is only fair for digitally active conventional banks to meet higher capital thresholds, as their operations mirror those of full-fledged digital banks.
Currently the BSP has licensed six digital-only banks:
• Overseas Filipino Bank (Land Bank)
• Tonik Digital Bank (Singapore-based)
• MAYA Bank (PLDT Group)
• UNObank (Singapore-based)
• UnionDigital Bank (Aboitiz-led Union Bank)
• GoTyme Bank (Gokongwei Group)
After a three-year pause, the BSP reopened digital bank applications in January 2025.
It is currently reviewing two new applications, which would bring the total number of digital banks to ten.
