Banks from Australia, South Korea and Japan have expressed interest in Thailand now that the central bank has given a green light for up to five foreign banks to set up subsidiaries here.
Anupap Kuvinichkul, senior director of the Bank of Thailand's financial institutions strategy, said banks from the three countries have begun talks with the central bank.
Malaysian banks, meanwhile, have discussed procuring new operating licences at a minimal level, while Chinese banks have yet to express interest.
Besides profiting from the upcoming Asean single market, foreign banks aim to use Thailand as a financial hub for entering the banking sector in Cambodia, Laos, Myanmar and Vietnam, said Mr Anupap.
With further liberalisation of the local financial market as part of the second phase of the Financial Sector Master Plan, foreign banking newcomers can coordinate activity between Thai and foreign businesses, he said.
The new foreign banks will initially focus on their niche market of foreigners investing in Thailand. Despite allowing a maximum of five foreign banks to obtain new licences, the central bank can reduce the number of banks if certain qualifications are not met.
The central bank has a time frame of January to March next year to authorise qualified banks, said Mr Anupap.
The process will be handed over to the Finance Ministry for final approval within three months. Foreign banks can submit applications to the central bank from July 2 to Dec 30.
Qualified foreign banks must have a good reputation, strong financial position, solid earnings and robust risk management and corporate governance.
The bank's country of origin must have a free-trade agreement with Thailand and reciprocate by allowing Thai banks to operate there.
Foreign bank subsidiaries are required to have at least 20 billion baht in paid-up capital and permitted to open up to 20 branches and 20 off-premises ATMs nationwide.
About the author
- Writer: Pathom Sangwongwanich
Position: Business Reporter