The Bangko Sentral ng Pilipinas (BSP) has rolled out new operational guidelines requiring thrift, rural, and cooperative banks to secure at least ₱1.0 billion in capital if they adopt digital-heavy business models. Issued under Circular No. 1240 on September 21, 2026, the policy ensures that smaller institutions venturing into the digital space operate safely while protecting everyday depositors from financial risks.
For the general public, this regulation provides stronger protection for money kept in local, regional, and digital-first banks. As small lenders expand beyond traditional physical branches to offer mobile apps, online loans, and fast digital deposits, their underlying risks increase. The new guidelines ensure that these institutions have a large financial cushion to protect customer deposits, protect against cyber threats, and maintain stable operations during rapid growth. Everyday depositors gain broader access to digital banking services with the peace of mind that their savings remain safe and properly supervised.
Under the new rules, existing thrift, rural, and cooperative banks identified as operating like digital banks must meet the ₱1.0-billion capital threshold—the same amount required for full-fledged digital banks—within six months of receiving formal notice. This requirement also applies immediately to any proposed acquisitions designed to transform small banks into technology-driven platforms. The guidelines target banks that deliver services primarily through digital channels, show substantial growth in loans or deposits online, or whose existing risk management setup no longer matches their digital operations.
To keep digital expansion safe, the regulator may impose additional safeguards. These include stricter supervisory reporting, temporary limits on new digital products or high-risk online features, and mandates to strengthen overall risk management and control frameworks.
The circular also opens the door for existing local banks to formally convert into licensed digital banks, joining the seven licensed digital banks currently operating in the country. A full digital banking license allows these institutions to offer their products nationwide rather than being limited to their immediate physical regions. However, conversion is not automatic: applicants must pass a thorough evaluation assessing their financial resources, corporate governance, operational readiness, and technology systems. Through these updated measures, the central bank continues to foster financial innovation while maintaining safety and confidence across the Philippine banking system.
