Siam Commercial Bank is seeking approval from the Central Bank of Myanmar (CBM) to upgrade SCB's representative office to operate under a bank subsidiary licence in the neighbouring country.
The subsidiary model would offer SCB greater opportunities to do banking business in Myanmar, said chief executive Arthid Nanthawitthaya.
Among the three options that the CBM has offered to foreign banks, a subsidiary licence is the most suitable model for SCB, Mr Arthid said.
In the event that SCB gains a subsidiary licence in Myanmar, the bank must inject fresh funds to upgrade its representative office to a subsidiary bank as required by CBM regulations, he said.
The CBM permits foreign banks to operate business in Myanmar under three licence types: subsidiary, foreign bank branch and equity holding in a local bank.
Those holding a subsidiary licence in Myanmar are allowed to offer wholesale and retail banking business and can have up to 10 branches or off-site ATMs. Minimum paid-in capital of US$100 million is required for operations.
Foreign banks that are eligible to upgrade their business to a subsidiary must have operated in Myanmar for at least three years.
In comparison, a foreign bank branch licence enables the holder to offer wholesale banking products and services, but the premises are limited to one location. Minimum paid-in capital of $75 million is required for a foreign bank branch.
Bangkok Bank (BBL) is the sole Thai bank with a foreign bank branch licence in Myanmar, having received one in 2015.
For equity investment in Myanmar banks, the CBM lets foreign banks hold a maximum 35% stake in a local bank. Permission is given on a case-by-case basis.
Thai banks, particularly large ones, are keen to expand their footprint in Asean markets where growth remains promising.
BBL in December announced an acquisition of Indonesia's PT Bank Permata worth $2.7 billion, while KBank is looking to buy a 35% stake in Ayeyarwaddy Farmers Development Bank (A Bank) in Myanmar.
SCB has signed a memorandum of understanding on a collaboration with Myanmar's second-largest bank, Ayeyarwady Bank (AYA Bank), to develop cross-border payment and fund transfer services between the two countries, SCB said in a release.
The deal is intended to explore and develop cross-border payment for workers and SME cross-border transactions and encourage the use of formal cross-border channels via both banks.
The two parties also agreed to explore direct baht-kyat conversion to support and service Thai and Myanmar clients.
Myanmar at present has about $1.1 billion in foreign direct investment from Thailand, which is the fifth-largest investor in the country.
AYA Bank will cooperate with SCB to help Thai firms in need of kyat for investment and working capital requirements in Myanmar, as well as for trade purposes.
Separately, Mr Arthid said SCB has prepared a budget of 20 billion baht for digital and innovation investment starting this year through subsidiary SCB 10X Co Ltd.
The investment will help the bank search for business opportunities and potential partners in the digital age.