Thailand: BoT delays publication of virtual bank rules to Q3

• Apr 26, 2023

The Bank of Thailand has postponed the issuance of virtual bank regulations until the third quarter of this year because it needs more time to clarify the new business licensing with related parties.

Central bank governor Sethaput Suthiwartnarueput said the regulator has received numerous inquiries about the new virtual bank licences from interested business operators.

The central bank plans to hold another public hearing about virtual banks to ensure clearer understanding of the new business, resulting in a delay to the timeline for licence applications, he said.

The bank intends to issue virtual bank regulations in the third quarter this year, said Mr Sethaput, delayed from the first quarter in the previous schedule. Applications for licences are expected to be made available in the fourth quarter of this year.

“The central bank will maintain the existing concept and guidelines for virtual bank business operations. The regulator will still offer only three licences for new business operations in the first round as originally planned,” he said.

Under a virtual bank licence, operators are allowed to raise deposits from individuals. The central bank wants to ensure the three initial operators can take care of depositors and manage risk while complying with regulations.

The regulator believes three operators is a suitable number, said Mr Sethaput.

In some countries, central banks granted a lot of virtual licences, but many operators failed to conduct enough business and needed to close their services, posing a risk to depositors and financial stability, he said.

The central bank’s first public hearing on virtual bank licences was in January and February of this year, during which it received many opinions and questions from both financial and non-financial business operators.

According to the regulator’s summary of the hearing, participants sought clarity on the development of useful innovations and which business areas were allowed to innovate. According to the regulator’s summary of the hearing, participants sought clarity on the development of useful innovations and which business areas were allowed to innovate.

Wipawin Promboon, the central bank’s senior director for the financial institutions strategy department, said the regulator planned to produce a handbook describing the virtual bank concept and guidelines to ensure a thorough and equal understanding among all parties.

“Tentative applicants are both financial service providers and non-financial operators. They have different understandings of our regulations to supervise financial institutions. We want to ensure all parties have a clear understanding of the business,” she said.

Source: https://www.bangkokpost.com/business/2557329/bot-delays-publication-of-virtual-bank-rules-to-q3