Into The Digital: BSP Imposes Additional Regulations On Digital Banks

On September 14, 2022, the BSP issued Memorandum Circular No. 1154, Series of 2022 entitled "Prudential Requirements Applicable to Digital Banks, and Amendments to Relevant Provisions of the Manual of Regulations for Banks and Non-Bank Financial Institutions and Manual of Regulations on Foreign Exchange Transactions" (Digital Banking Memorandum). The Digital Banking Memorandum is the second set of guidelines for digital banks after the digital bank framework was released by the BSP in 2020.

Key provisions

• Establishment of Digital Banks.The Digital Banking Memorandum revises the bank establishment provisions of the MORB to reflect digital banks. It sets out the definition, prudential requirements, and minimum capitalization requirement for digital banks.