MANILA - The Bangko Sentral ng Plilipinas said it welcomes the Virtual Banking Act seeking to establish a regulatory framework for virtual-only banks as it will 'level the playing field'.
In a letter to House Ways and Means Committee chair Albay Rep. Joey Salceda, BSP Gov. Benjamin Diokno said House Bill 5913 will "reinforce" provisions under the General Banking law.
“The creation of a regulatory framework for digital banks promotes a level playing field by allowing new entrants to credibly compete with incumbent banks, as well as prevents regulatory arbitrage,” Diokno said in his letter dated Sept. 7.
Under the proposal, virtual-only banks will be a separate classification.
The measure was filed last Jan. 6, anticipating the need for contactless payments due to COVID-19, Salceda, one of the bills authors said.
"Just the day after we filed this bill, we received support from the Cebu Bankers Club for this proposal, and former colleagues in the industry have also expressed their appreciation for this proposal,” Salceda said.
The BSP said it employs regulatory "sandboxes" to engage financial technology players just how it did with e-money pioneers such as GCash and Smart Money in 2004 "at a time when there was no established model anywhere in the world."
Under HB 5913, the following functions of a virtual bank are granting of loans, investing in readily marketable bonds and other debt securities, issuing domestic letters of credit, among others.
Virtual banks should also have a minimum capital of P20 billion.
Several digital banks have opened its services to Filipinos, leveraging on high internet and smartphone penetration to reach the unserved and underserved in rural areas.
-- with a report from RG Cruz, ABS-CBN News