Thailand will allow the nation’s first virtual banks to offer services in 2025 amid a push to boost competition, widen loan access and cut costs for businesses and individuals.
(Bloomberg) — Thailand will allow the nation’s first virtual banks to offer services in 2025 amid a push to boost competition, widen loan access and cut costs for businesses and individuals.
The Bank of Thailand plans to issue three such licenses in 2024 before the operations begin a year later, said Assistant Governor Tharith Panpiemras. There are about 10 parties who have expressed an interest to apply for the permits, he said. Applications will open later this quarter.
Southeast Asia’s second-biggest economy is the latest country to adopt the concept of virtual lenders as technology companies including Ant Group and Grab Holdings Inc. expand financial services to tap rising demand in the region. While Thailand lacks independent virtual banks, Bangkok Bank Pcl, the nation’s largest lender, Kasikornbank Pcl and other local peers have boosted their investments, offering various digital services including online accounts and payments.
“Higher competition will strengthen the overall banking system by prompting existing players to improve their services and innovations,” Tharith told a press briefing Thursday. “New virtual banks will also expand their services into new underserved customers with lower costs that would benefit the overall customers.”
Virtual banks may provide full-service banking businesses and will be subject to the same regulations and supervisions as traditional commercial banks. Still, they won’t be allowed to open physical branches and operate their own ATM machines, according to Tharith. Applicants must have a minimum registered capital of 5 billion baht that must be scaled up to 10 billion when fully functional.
The Bank of International Settlements has said the proliferation of virtual banks will boost financial inclusion, but has warned regulators to ensure consumer data is protected.
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