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Philippine c.bank approves digital banking framework

Published 11/26/2020, 05:07 PM
Updated 11/26/2020, 05:10 PM
© Reuters.

MANILA, Nov 26 (Reuters) - The Philippine central bank
approved on Thursday rules allowing the creation and licensing
of digital banks as part of efforts to extend financial services
as consumers increasingly turn to the virtual realm for banking.
The central bank expects at least 50% of payments will shift
to digital by 2023, with 70% of adults using an digital
transaction account by then, giving consumers more options and
steering them away from loan sharks.
"We see these banks as additional partners in further
promoting market efficiencies and expanding access of Filipinos
to a broad range of financial services," Bangko Sentral ng
Pilipinas (BSP) Governor Benjamin Diokno said in a statement.
Under the framework, digital banks would be a distinct
classification of lender. Digital banks would offer financial
products and services that are processed end-to-end through a
digital platform and/or electronic channels with no physical
branches, the central bank said.
Digital banks should set up a headquarters in the
Philippines for management and support operations, including the
handling of customer concerns, the central bank said.
The central bank's policymaking department may limit the
number of digital bank licenses, depending on the applications
it gets.
"The BSP is looking to attract players with strong value
proposition, sufficient financial strength, technical expertise
of management and effective risk management," Diokno said.
Foreign banks CIMB and ING Bank have launched digital
banking platforms in the Philippines.
The central bank's payment settlement facility processed
5,000 transactions valued at 2 trillion pesos ($41.6 billion)
daily in the first half, triple the daily average for 2004 to
2007, central bank data showed.
($1 = 48.0800 Philippine pesos)

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