At least two banks are currently in talks with the Bangko Sentral ng Pilipinas (BSP) to explore putting up either an Islamic bank or Islamic banking unit (IBU) to pursue their previous plans, which were put on hold due to the pandemic.
BSP Deputy Governor Chuchi G. Fonacier said the two banks are the same foreign and local financial institutions that approached the regulator in 2019, pre-Covid-19 crisis. He did not identify these banks. Muslim Filipinos will soon avail of Islamic finance in the Philippines “Pre-pandemic, there were two interested.
At the moment, they are still reviewing their timelines,” Fonacier said in a text message. The BSP entertained exploratory talks with three conventional banks to set up IBUs but these inquiries did not advance to the application stage because the pandemic happened in 2020. The BSP is currently preparing a new rule for the required minimum capital level for non-Islamic banks or conventional banks planning to establish IBUs.
The proposed capital requirement for Islamic banks are the same as conventional banks which is a range of P3 billion to P20 billion depending on how many branches will be put up. Fonacier said last month that a conventional bank that does not meet the minimum capital of a universal bank, but is a subsidiary of a universal bank or commercial bank, may be allowed to operate an IBU within a reasonable transitory period of five years.
Based on the draft circular, in establishing Islamic banks and IBUs, the BSP plans to impose the same minimum capitalization for a universal bank to apply to an Islamic bank or a conventional bank with an IBU.—Manila Bulletin