TheBangko Sentral ng Pilipinashas set a PHP1-billion minimum capital requirement for certain thrift, rural and cooperative banks moving toward digital-bank business models. BSP Circular No. 1240, issued September 21, covers institutions the regulator determines are operating like digital banks or whose capital and risk controls no longer match their model. The rule is targeted rather than universal: it does not say that every Philippine bank must immediately raise capital, and it does not announce the closure of any named lender or digital banking service.
Covered banks will havesix months from receiving a BSP noticeto comply with the new capital floor. The circular also applies when a proposed acquisition is intended to transform a thrift, rural or cooperative bank into a technology-driven model. In that case, the PHP1-billion minimum must be met when the application is filed, alongside prudential standards applicable to digital banks. The timing begins with the regulator’s notice, not simply with the circular’s publication or the date a bank first adds digital services.
The central bank may impose additional safeguards depending on an institution’s activities and risk profile. These can include enhanced supervisory reporting, restrictions on selected activities or new digital products, and strongerrisk-management and internal-control systems. BSP said the goal is to ensure that banks can manage risks arising from the nature, scale and complexity of their operations. The requirements focus on prudential capacity, so consumers should not interpret the measure as a general warning that digital banking access is being withdrawn.
Circular 1240 also leaves open a path for additional digital-bank licenses, including conversions from existing thrift, rural and cooperative banks, subject to the applicable licensing framework. BSP will review governance, systems, business model, readiness and resources before approving a conversion. The policy therefore combines a higher capital expectation for digital-centric operations with a possible route to broader digital services. For now, the practical next step is for covered banks to wait for formal notice and assess compliance against the regulator’s specific criteria.
