The Bank of Thailand plans to hold a public hearing about virtual bank licensing early next year, in a move to expand access to financial services for underbanked and unbanked consumers.
The central bank has been drafting the licensing guidelines, which it plans to reveal at a public hearing in early 2023. The Bank of Thailand studied virtual bank models in several countries, including Singapore, said deputy governor Ronadol Numnonda.
The Monetary Authority of Singapore and the Malaysian central bank, Bank Negara Malaysia, have already licensed virtual banking businesses. In some countries this licence is called a pure digital bank licence.
Mr Ronadol said the Bank of Thailand's virtual bank licensing guidelines would be in line with the country's economy and the market environment.
The central bank will not allow financial institutions with commercial banking licences to apply for virtual bank licences because it wants such licences to be focused on new unbanked and underbanked customers, and not existing customers.
However, other entities, which are under a commercial bank group and having no banking licenses, can apply for the new licenses.
According to the Bank of Thailand's guidelines, virtual banks can use loan applicants' alternative data, such as utility bills, to evaluate their financial behaviour and financial discipline.
Moreover, he said the central bank would allow virtual banks to provide a money deposit service similar to conventional banks. The virtual banks will have to comply with its normal banking regulations and financial standards, such as those covering capital adequacy and loan-loss provisions, said Mr Ronadol.
Arthid Nanthawithaya, chief executive of SCB X, the holding company for Siam Commercial Bank, said the group was keen to apply for a virtual bank licence, allowing it to explore greater business opportunities. He said the company will wait for the licensing launch before deciding whether a subsidiary will apply, or it will set up a new entity to obtain the licence.
Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said earlier KBank is interested in applying for a licence in order to expand into new businesses and new customer segments, in line with the digital era.