BSP eyes new rules for digital-centric mid-sized, small banks

The Bangko Sentral ng Pilipinas (BSP) has released a draft circular outlining progressive prudential requirements for thrift, rural and cooperative banks that are increasingly shifting to digital operations.

- By KEISHA TA-ASAN

The proposed regulation, once approved by the Monetary Board, will classify digital-centric banks into three tiers based on the scale and maturity of their digitalization, with each tier subject to progressively higher capital and compliance standards.

"The progressive prudential requirements aim to foster innovation while ensuring the safety and soundness of the banking system," the BSP said in the draft circular.

"This likewise promotes a level playing field for both incumbents and new entrants as banks navigate the opportunities and challenges brought about by rapid digitalization in the banking sector," the central bank said.