Thailand starts accepting virtual banking permit applications

Big Buddha in Bangkok, Thailand / Photo credit: Larcsky789/Shutterstock

Thailand’s Finance Ministry said the country is opening applications for virtual bank permits for the next six months, Reuters reported.

This decision is aimed at extending financial services to those lacking or having limited access to banks. According to a report from financial services firm Macquarie in May 2022, half of Thailand’s population has no access to financial products, while 18% remains underbanked.

The ministry specified that prospective banks need adequate business experience and funds to operate a commercial bank. Thailand’s officials have not placed a limit on the number of permits to be issued, however.

Several major banks in the country have previously expressed their intention to establish a virtual bank, such as SCBX, which partnered with KakaoBank to pursue the license. This collaboration mirrors moves by players like Grab and Singtel, as well as Standard Chartered and FairPrice Group in Singapore to form GXS Bank and Trust Bank, respectively.

The Finance Ministry and Bank of Thailand will have nine months to review applications, with approved virtual banks set to be given a year to set up and begin their services. The final verdict will be based on what fits the existing system of Thai financial institutions, the ministry said.

Previously, the Bank of Thailand has conducted two public consultations to formulate the licensing framework for virtual banks. Based on its website, the country’s central bank described that virtual banks “offer services mainly through the digital channel” and are not allowed to establish physical branches.

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