The Central Bank of Thailand has recently shared plans to allow virtual banks to operate in the country by 2025. This will be the first time banks will start operating virtually in the country. The Bank of Thailand has also published a paper called “Consultation Paper on Virtual Bank Licensing Framework,” which says that applications for banks to provide services virtually.
Virtual banks in Thailand
By allowing virtual banks to operate in the country, Thailand will ensure that it becomes easier for new banks to provide services there and thus increase competition. At the same time, it will aid in Thailand’s economic growth. The Central Bank of Thailand plans to give out 3 different types of licenses to banks that want to operate virtually. These licenses will be rolled out in 2024.
The regulations and rules that will be applicable to these virtual banks will be the same as traditional banks under the licensing framework of the country. The banks also need to meet certain requirements if they want to obtain a license for virtual banks.
The Central Bank also made an important point that all virtual banks should follow. It said that Virtual banks should avoid engaging in irresponsible lending practices, providing preferential treatment to related parties, or abusing their dominant market position, as these actions can pose risks to the financial stability of depositors and consumers.
Investor protection
The virtual banks will operate in a restricted phase initially to ensure this doesn’t turn out to be a financial risk for users. The restricted phase could last for a year or even more, depending on the authorities and the way the banks operate.
Thailand’s authorities are focusing a lot on investors’ protection as their SEC is also planning to tighten rules for crypto. There are also guidelines being designed for running crypto ads in the country because, a lot of times, they can be deceiving. But that doesn’t mean that they will be slowing down on crypto adoption, as they have recently partnered with Hungary to support the adoption of blockchain tech.
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