^
UnionBank gets license to create digital bank
In a disclosure to the Philippine Stock Exchange, the bank said the Monetary Board approved the digital bank license of its wholly owned unit Union Digital Bank last July 15.
UnionBank/Released

UnionBank gets license to create digital bank

Lawrence Agcaoili (The Philippine Star) - July 22, 2021 - 12:00am

MANILA, Philippines — Union Bank of the Philippines has obtained the approval of the Bangko Sentral ng Pilipinas (BSP) to establish a digital bank.

In a disclosure to the Philippine Stock Exchange, the bank said the Monetary Board approved the digital bank license of its wholly owned unit Union Digital Bank last July 15.

The Aboitiz-led bank has committed to spend at least P2 billion for its capital expenditures this year, including the construction of an innovation hub to future-proof its business.

The BSP has so far given four entities the go-signal to operate as digital banks. Aside from UnionDigital, the regulator has approved the applications of Overseas Filipino (OF) Bank of state-run Land Bank of the Philippines, Tonik Digital Bank and UNObank, both based in Singapore.

The BSP issued Circular 1105 in December last year recognizing digital bank as a new bank category separate and distinct from the existing bank classifications. It is defined as a bank that offers financial products and services that are processed end-to-end through a digital platform and electronic channels with no physical branches offering financial products and services.

The guidelines pegged the minimum capitalization of digital banks at P1 billion. Under the framework approved by the Monetary Board, the number of digital bank licenses is initially capped at five.

“The limit on digital banking licenses allows the BSP to assess the financial performance of digital banks and their impact to existing banks and the banking system and their effectiveness in achieving the BSP’s financial inclusion goals,” BSP Governor Benjamin Diokno said.

He said the regulator needs to strike a balance between promoting an enabling environment for financial innovations on one hand, and ensuring safety and soundness of individual financial institutions and the entire system as well as protection of consumers on the other hand.

The BSP embarked on a Digital Payments Transformation Roadmap to convert 50 percent of total retail transactions in the country to electronic channels and to raise the number of Filipinos owning financial accounts to 70 percent by 2023.

UNION BANK
Philstar
  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with