THE Bangko Sentral ng Pilipinas (BSP) recently issued a circular detailing the capital and other requirements of banks shifting to digital bank business models.
Circular No. 1240, issued Sept. 21, 2026, states that existing thrift banks (TBs), rural banks (RBs) and cooperative banks that the BSP determines are operating under a business model similar to that of a digital bank must have a minimum capital of P1 billion.
The BSP gave these banks six months from receipt of the notice to comply with the requirement.
When a proposed acquisition is intended to transform a TB, RB, or cooperative bank into a technology-driven business model, the BSP also requires a P1-billion minimum capital requirement at the time of application.
The bank must also comply with prudential standards applicable to digital banks.
The BSP may also impose additional requirements, including enhanced supervisory reporting; restrictions on certain activities or new digital products and services; and strengthened risk management and control systems.
The requirements will cover TBs, RBs, and cooperative banks that fall under two conditions.
First, they operate under a business model similar to that of a digital bank or their risk management systems, and capital is no longer commensurate with their official business model and risk profile. Second, they use digital platforms to deliver services and record significant growth in loan or deposit balances.
“The requirements aim to ensure that these banks can adequately manage risks arising from the nature, scale, complexity, and risk profile of their operations,” the BSP said.
The circular also allows the BSP to issue additional digital bank licenses, including through the conversion of existing TBs, RBs, and cooperative banks.
This is, however, subject to the applicable licensing framework for digital banks.
The BSP said a digital banking license will allow them to market their digital services to a wider customer base, including those outside their usual geographic area for business.
Conversion to a digital bank license is subject to review.
The BSP will consider the readiness to run a digital bank, robustness of governance and systems, value proposition, business model, and resource capabilities. Currently, there are seven licensed digital banks in the country. / PNA
