Philippine central bank eases requirements on Islamic banking units

Relaxed capital, processing fees, amongst others, for IBUs. 

The Bangko Sentral ng Pilipinas (BSP) has relaxed capital requirements, license processing fees, and liquidity reports, amongst others, for Islamic banking units (IBUs).

In the amended rules, IBUs will not be subjected to a separate capital requirement. Instead, conventional banks with IBUs will follow the capital requirements that apply to their bank category.

The processing fee for an IBU license will also follow the fees corresponding to the bank’s category.

The new rules also institutionalise the three-year observation period, starting from the launch of Islamic banking operations, for submitting prudential reports on Islamic banking operations.

“This gives industry players time to get familiar with the reportorial requirements,” the BSP said.

IBUs are no longer required to submit a separate liquidity report, as they can now integrate it with their bank-wide liquidity report.

This is part of the BSP’s promotion of Islamic banking and finance in the Philippines, in line with Republic Act No. 11439 or the Islamic Banking Law.