THE central bank has issued capital and other requirements to ensure that thrift, rural, and cooperative banks shifting to digital bank business operate in a ‘safe and sound’ manner. Under Circular 1240 dated September 21, 2026, the Bangko Sentral ng Pilipinas (BSP) said existing thrift, rural and cooperative banks determined by the BSP to be operating under a business model similar to that of a digital bank must meet the P1-billion minimum capital requirement applicable to digital banks, among other requirements.
‘They have six months to comply with these prudential requirements from receipt of the BSP’s notice,’ the central bank said in a statement it issued last Wednesday.
Similarly, when a proposed acquisition is intended to transform a thrift, rural, or cooperative bank into a technology-driven business model, the BSP shall require P1-billion minimum capital requirement at the time of application.
The BSP said the bank must also comply with prudential standards applicable to digital banks.
Additional requirements, including enhanced supervisory reporting, restrictions on certain activities or new digital products and services and strengthened risk management and control systems may also be imposed, the central bank added.
The BSP explained the requirements will cover thrift, rural and coop banks that fall under two conditions.
First, they operate under a business model similar to that of a digital bank or their risk management systems and capital are no longer commensurate with their official business model and risk profile.
Second, they use digital platforms to deliver services and record significant growth in loan or deposit balances.
‘The requirements aim to ensure that these banks can adequately manage risks arising from the nature, scale, complexity, and risk profile of their operations,’ the central bank noted. Andrea E. San Juan
The circular also allows the BSP to issue additional digital bank licenses, including through the conversion of existing thrift, rural and coop banks.