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The Overseas Filipino Bank, a wholly-owned subsidiary of state-run Land Bank of the Philippines, secured a digital banking license from the Monetary Board of the Bangko Sentral ng Pilipinas to become the first branchless digital-only bank in the country, according to a report by Manila Standard.
OFBank commenced its banking operations in June 2020 using a thrift bank license and received its digital banking license from the Monetary Board on March 25.
Finance Secretary Carlos Dominguez III said in a statement over the weekend “this milestone in the country’s banking history not only fulfills President Duterte’s campaign pledge to create a bank that caters to overseas Filipinos, but will also help the Philippines leapfrog to the digital economy.”
“When President Duterte said he would create a bank that would serve overseas-based Filipinos, he wanted a bank that would be trailblazer in terms of modernizing and expanding the scope of the services it offers to them,” Dominguez said.
OFBank was created under Executive Order 44 that was signed by President Duterte in September 2017.
The Philippine Postal Savings Bank was acquired by LandBank and converted into the OFBank to fulfill the EO’s provision on the need to establish a policy bank dedicated to provide financial products and services tailored to the requirements of overseas Filipinos.
It was launched virtually on June 29, 2020 amid the COVID-19 pandemic as the Philippines’ first branchless and digital-centric government bank.
While fine-tuning its operations, systems and processes to enable its official transition into a digital bank, the OFBank operated as a thrift bank.
The BSP issued Circular 1105 on The Guidelines on the Establishment of Digital Banks in December 2020, clearing the way for the OFBank to apply for a license as a digital bank.
OFBank submitted a letter of intent on Jan. 20, 2021 to the Supervisory and Policy Research Department of the BSP signifying its interest to be a duly-licensed digital bank and followed it up with an application on Feb. 1 for the conversion of its thrift bank license into a digital bank license.
OFBank offers four digital products and services that include a digital onboarding system with artificial intelligence, which allows the real-time opening of a mobile banking deposit account on supported iPhone or Android devices.
Some 19,887 DOBSAI accounts in the OFBank were opened with an outstanding balance of P104.37 million as of December 2020.
Aside from deposit savings accounts, OFBank’s digital services also include fund transfers, bill payments and applications for multi-purpose loans.
The volume of OFBank’s electronic banking inflows reached 45,997 accounts as of December 2020 for transactions amounting to P467 million, with outflows from 62,633 accounts of P372.41 million.
A total of 3,517 transactions amounting to P40.72 million were done by OFBank clients for the Premyo Bonds second offering and 380 transactions valued at P8.27 million for the RTB-25 (Retail Treasury Bond-25) issuance that were all coursed through the bank’s mobile application.
The OFBank’s global digital reach spans 112 countries, with its clients able to access online the services of 763 merchants onboarded in its mobile application via the LinkBiz.Portal.
These merchants included 124 utility and service companies, 186 educational institutions, 277 government agencies and local government units, 140 cooperatives/associations/foundations/corporations, 20 hospitals/healthcare/clinics and 16 banks, credit card companies and insurance companies.
OFBank’s approved conversion into a digital bank is the first phase of the three-stage licensing framework of the BSP on the establishment of new digital banks.