BOT Approves Virtual Bank Licenses to Promote Financial Inclusivity

[webfact]

    
BANGKOK (NNT) - The Bank of Thailand (BOT) has granted preliminary approval for three virtual bank licenses, in a bid to foster financial inclusivity for underserved customer segments.

 

According to BOT Governor Sethaput Suthiwartnarueput, the limited number of licenses aims to maintain stability in the local financial market and safeguard depositors from risks associated with new ventures.

 

The finalization of licensing regulations is expected to be completed this month, with submission to the Finance Ministry for approval to follow. The application process for licenses is slated to open in 2024, and official operations for the virtual banks are projected to commence in 2025.

 

While these virtual banks will not be classified as domestic systemically important banks, the central bank recognizes that any risk or issue with these entities could still impact public confidence and the overall financial system. The BOT aims to closely monitor the business operations of the virtual banks to ensure their sustainability and align with the central bank’s objective of nurturing the virtual banking industry.

 

The requirements set for applicants are relatively high, with a minimum registered capital of 5 billion baht, ensuring that only robust and substantial entities apply for the licenses. During the initial phase, prospective virtual banks may face significant expenses, particularly for customer acquisition and IT investments, making business survival a top concern.

 

Sethaput highlighted the importance of promoting reasonable pricing under open competition for virtual banks. He pointed out that an increased number of players does not necessarily guarantee low-interest rates, as rates also depend on credit risk.

 

At present, Thailand has 17 conventional banks with full-branch services and three virtual banks in the pipeline. In comparison, South Korea has 52 conventional banks and three virtual banks, Singapore has 34 conventional banks and four virtual banks, and Malaysia has 42 conventional banks and three virtual banks.

 

by Krajangwit Johjit

 

 

Source: https://thainews.prd.go.th/en/news/detail/TCATG230721111852521

 

-- © Copyright NNT 2023-07-21

 

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[Cake Monster]

22 hours ago, webfact said:

bid to foster financial inclusivity for underserved customer segments.

Get those Loans issued to anybody ASAP