Islamic finance gets P3-B floor

The Bangko Sentral ng Pilipinas (BSP) is raising stakes for Islamic finance, requiring full-fledged Islamic banks to hold a minimum capital of P3 billion—matching universal banks—while allowing conventional banks to open an Islamic banking unit (IBU), provided they satisfy existing capital standards.

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Based on the latest Circular published by the BSP, “the minimum capitalization requirements for a UB shall apply to a full-fledged IB [Islamic bank].”

Under the 2022 Manual of Regulations for Banks (MORB), universal banks with only a head office must maintain at least P3 billion in capital. Banks with up to 10 branches need P6 billion, P15 billion for banks with up to 100 branches, while those with over 100 branches must have P20 billion.