BSP Circular No. 1173, Series of 2023, Modified Minimum Capitalization of Conventional Banks with Islamic Banking Unit

The Circular on the Modified Minimum Capitalization of Conventional Banks with Islamic Banking Units (IBUs) was approved to afford flexibility in the establishment of IBUs and expand access to Shari'ah compliant banking products and services for all Filipinos. It amends the Manual of Regulations for Banks to introduce modified minimum capitalization requirements for conventional banks with IBUs. It provides that minimum capitalizations for a Universal Bank shall apply to an Islamic Bank. Nevertheless, it provides for a transitory period wherein a conventional bank that is a commercial bank or a subsidiary of a universal or commercial bank, which complies with the minimum capital requirements capital requirements applicable to its banking category, may be allowed to operate an IBU.