The Bangko Sentral ng Pilipinas has required thrift, rural and cooperative banks operating like digital banks to hold at least ₱1 billion in capital. Circular No. 1240, dated 21 September, applies when the central bank determines that an institution's business model resembles that of a digital bank or that its controls and capital no longer match its risk profile. Notified institutions have six months from receiving the BSP notice to comply with the prudential requirements.
The same ₱1 billion floor applies at the application stage when a proposed acquisition is intended to transform a thrift, rural or cooperative bank into a technology-driven business. The BSP can also require enhanced supervisory reporting, restrict activities or new digital products, and demand stronger risk-management and control systems. The measures are intended to prevent rapid digital growth from outpacing a bank's ability to manage operational and financial risks.
CAPITAL AND SUPERVISION
The rules cover institutions using digital platforms that record significant growth in loans or deposits, as well as banks whose business models resemble those of digital banks. That approach lets the regulator apply digital-bank safeguards based on actual activity rather than the licence label alone.
Circular 1240 also allows the BSP to issue additional digital-bank licences, including by converting existing thrift, rural and cooperative banks, subject to the licensing framework. Conversion reviews will consider governance, systems, business-model viability, resources and readiness to operate digitally. Seven digital banks were licensed in the Philippines when the rule was announced.
IMPLEMENTATION AND LICENSING
The immediate effect will depend on which institutions the BSP formally identifies as operating like digital banks. Those notices will start the six-month compliance clock and may require affected lenders to raise capital, strengthen controls or reconsider the pace of digital expansion. Acquisition proposals designed to create technology-driven banks will face the capital test before approval.
The next concrete milestones are the BSP's first notices under the circular and any licence-conversion decisions. Until then, the rule establishes a common prudential floor without automatically reclassifying every bank that offers online services.