Thailand
Thailand: BoT market conduct rules from Jan 1
The Bank of Thailand’s regulation on market conduct will be effective from Jan 1 next year while comparative information regarding financial products will be available on the central bank’s website from the first quarter to enable better competition in the market.
“The regulation focuses on improving competition among financial institutions to ensure appropriate and fair services and fees, and also provide information to protect customers’ rights,” said Thanyanit Niyomkarn, senior director of the financial consumer protection and market conduct department at the central bank.
She said the regulation will be the first comprehensive one governing market conduct, which covers end-to-end financial institution processes that are related to customer services while also fining any practice violations.
“The regulation will set a clear and detailed standard for market conduct, which will help the central bank better enforce its existing power given by the Financial Institution Business Act when these financial institutions violate the laws,” said Mrs Thanyanit.
According to the Financial Institution Business Act, the Bank of Thailand’s mandate includes issuing notifications requiring financial institutions to comply with measures to protect consumers, and institutes that fail to comply with the requirements will be subject to punishment in the form of fines or licence revocation.
The regulation also requires public disclosure of wrongdoing on the central bank’s website and also on the financial institution’s website, where it can be easily accessed.
She said the regulation will also authorise the central bank to ban operations that do not comply with the market conduct regulations to prevent customer damage.
The department plans to launch a website to inform customers about market conduct and related regulations. The website will contain features to compare financial products offered by financial institutions.
She said in the first phase, the central bank will offer comparison of savings products and debit cards in the first quarter of next year, while comparison of personal loans, credit cards, leasing and mortgages will be available in the second quarter.
“This feature is expected to help improve transparency and help customers get services or products that meet each customer’s specific need,” said Mrs Thanyanit.
According to the new regulation, financial institutions are also required to have their sales sheets, documents that contain important information about each financial product, to be signed by customers.
She said the regulation also requires customer consent as to whether they will allow financial institutions to use their information for marketing purposes.
Mrs Thanyanit said in the initial stage, the regulation will apply to financial institutions under the central bank’s supervision, excluding specialised financial institutions (SFIs), which are required to comply with the regulation in the next phase.
She said the regulation will not affect sales of financial institutions’ main products such as savings, loans or plastic cards, but sales of insurance products that are bundled in other financial products may be affected.
“Sales of these kinds of [bundled insurance] products have overshot in the past, so the regulation would somewhat slow down growth and make it more sustainable,” said Mrs Thanyanit.
The central bank set up the market conduct club, consisting of financial institutions under the Bank of Thailand’s oversight, four SFIs that have retail customers and two other regulators — the Securities and Exchange Commission and the Office of the Insurance Commission.
Source: https://www.bangkokpost.com/business/news/1361195/bot-market-conduct-rules-from-jan-1