Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Thursday (Aug. 19) announced that the country’s central bank would stop accepting digital banking applications on Sept. 1 to allow regulators “to monitor” the industry.
“We need to ensure that the business environment continues to allow healthy competition among banks enabling them to offer innovative and competitive financial products and services to their clients,” he said in the announcement.
The Monetary Board approved the applications of five digital banks, including UNObank, UnionDigital Bank and GoTyme. Two of the approved institutions — Overseas Filipino Bank Inc. and Tonik Bank — have converted their existing licenses to digital ones.
That board’s approval is the first of three steps banks must take to get a digital bank license in the Philippines. Bangko Sentral ng Pilipinas is processing two other digital bank applications.
“As these tech-savvy, customer-centric players introduce innovations in the banking sector, we are confident that the BSP is on track to achieving its digitalization and financial inclusion goals,” said Diokno.
The agency will review applications submitted by the end of August in the order they are received.
Related: Philippines Central Bank Halts Lyka Social Media Payments
In July, Bangko Sentral ng Pilipinas (BSP), said social media platform Lyka must suspend its activities as an operator of payment systems as part of a FinTech crackdown by local officials.
Hong Kong-based Lyka operates in the Philippines and allows customers to buy, trade and use gift cards in electronic mode (called GEMs). Lyka has said it will cooperate and register with the Bangko Sentral ng Pilipinas as an operator of payment systems.
In October, the Filipino government began mulling whether it would curtail the number of digital banks in the country. Diokno said at the time that the digital-first mindset is accelerating as a result of the digital-first economy growing out of the COVID-19 pandemic.