August 13, 2019
The government is eyeing to relaunch the Overseas Filipino Bank (OF Bank) into a branchless digital lender by next year.
“We are working to transform it into a branchless digital bank. We are in close coordination with the BSP (Bangko Sentral ng Pilipinas),” Land Bank of the Philippines President (LandBank) Chief Executive Officer Cecilia Borromeo said in an interview late last week.
A subsidiary of LandBank, OF Bank was launched in January this year. It was described as “the government-owned and -controlled bank with the most extensive branch network that will cater to the needs of the families of overseas-based Filipinos.”
Borromeo said the lender is envisioned to operate as the first “beta bank” in the Philippines by June 2020. Beta banks are defined as greenfield subsidiaries of existing banks, or joint ventures where existing banks are central owners. Beta banks get the right to offer bank services through the existing bank’s license.
“The BSP calls it a ‘beta bank’. Together with central bank, we are crafting the rules because there are no rules yet (on this type of banks),” she explained.
“We have to do first the regulatory work. I think we can have that digital bank up and running by June of 2020,” Borromero added.
She added the beta bank will not require a huge investment as it will use LandBank’s digital system. “We just need to tweak it and the digital bank will be treated like a branch of LandBank so it will not entail a huge investment,” she said.
Finance Secretary Carlos Dominguez 3rd said the OF Bank can lend to individuals and businesses, offer insurance and investment products, as well as act as payment platform.
“We want to leap-frog every other banking institution in this country,” he said. “It makes sense to (transform it) because the potential customers such as overseas Filipino workers are already 10 million. So it’s better to spend time on doing it digitally because it is easier to reach all potential customers,” he added.
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