BSP to license four new digital banks starting 2025, ending 3-year moratorium

The Bangko Sentral ng Pilipinas (BSP) is set to lift the moratorium on digital banking licenses starting January 1, 2025, allowing up to four new digital banks to operate, for a maximum of ten.

This decision follows the Monetary Board’s approval, aiming to harness the benefits of digital banking while managing associated risks, the central bank said.

In a statement, BSP Governor Eli Remolona, Jr. emphasized the importance of monitoring developments and assessing new players' impact on the banking system.

Eli Remolona Jr.

The Governor of the Bangko Sentral ng Pilipinas said "applicants must bring something new to the table. We want to see unique product and service offerings that are different from that offered by the existing market players."

Since the Digital Banking Framework's inception in December 2020, six digital banks have been operating in the Philippines. The new policy will add four more licenses, either to new entities or converting existing banks.

The central banks said applicants will undergo a rigorous evaluation process, focusing on their value proposition, business model, and resource capabilities.

They must demonstrate transparency in ownership, the suitability of shareholders, proper governance, and robust risk management. Additionally, new digital banks must offer innovative solutions distinct from current market offerings, targeting underserved segments.

Remolona highlighted the need for unique products and services that can expand financial inclusion and digital adoption.

The decision aligns with BSP's goals of financial system stability and broader digital transformation, he explained.

This policy shift reflects BSP's ongoing assessment of digital banks' performance and their contribution to the financial ecosystem, reinforcing the central bank’s commitment to innovation and inclusion.