Philippines Central Bank Cracks Down on Entities Posing as Digital Banksby Fintech News Philippines June 18, 2021
The Bangko Sentral ng Pilipinas (BSP) has issued a circular to put a stop to any entities that are misrepresenting themselves as digital banks in their marketing activities.
While BSP has only recently granted its first batch of licenses, several entities have been seen posing as digital banks despite operating under a different license to mislead the public.
These entities were warned against misrepresenting the public with respect to their banking categories or the products and services that they have been authorised to offer.
In the circular to amend the rules and regulations governing bank advertisements, these entities were told to “inform their depositors and other clients by advertisement or publication of the termination of benefits previously advertised or publicised”.
Nonetheless, universal and commercial banks may market themselves as digital banks especially if they do not have physical branches, sub-branch or branch-lite units offering financial products and services.
These banks must have at least one significant activity that is fully digital or processed end-to-end through a digital platform or electronic channels along with a few other conditions.
The BSP circular also requires these entities to notify the central bank’s supervising department before they declare themselves a digital bank to the public.
In an effort to promote transparency, BSP has mandated that banks need to explicitly state on their marketing platforms including websites and mobile apps of their banking license’s category.
Of the three digital bank licenses that was given out, the first was to the state-owned Overseas Filipino Bank (OFBank) which is a wholly owned subsidiary of the LANDBANK in March.