Summary of guidelines for the National Bank to grant a branchless bank license

Summary of guidelines for the National Bank to grant a branchless bank license / by Invest Man
a few days ago The Bank of Thailand has announced plans to establish a “Virtual Bank” or the Thai name is “Branchless Bank”

The Virtual Bank has the following main requirements:

– Must be established in the form of a commercial bank registered in the country and must have a head office in Thailand

By establishing in the first 3-5 years, the Virtual Bank that was established will be under the supervision of the BOT, which is called Phasing

The BOT can order improvements, corrections to the system, or even orders the cessation of the business if the BOT deems that there is a risk or the phasing period has expired but the business is not yet ready to provide services or the phasing period has not yet been extended. can fix the problem

And when the Virtual Bank passes the Phasing phase, it will enter the Phasing phase. Full-functioning It has the status of a full-fledged commercial bank without the BOT having to supervise it as closely as before.

Which Virtual Bank must have a registered capital of at least 5,000 million baht and gradually increase the capital until 10,000 million baht before exiting the phasing period to support business expansion. and loss at the beginning

In addition, the BOT has also relaxed the shareholding requirements, such as

– Able to hold more than 10% of shares per person
– foreigners who come to invest must jointly invest with Thai companies by holding no more than 25% of shares and requesting a maximum waiver of not more than 49%

And after the BOT can choose who will receive the license Entrepreneurs will have 1 year to prepare before opening for service. It is expected that Virtual Bank will be available in the middle of 2025.

Regarding supervision, the BOT will apply the same criteria as general commercial banks. but will increase in terms of providing digital services such as system failures should not exceed 8 hours per year and each time It takes time to restore the system back to service within 2 hours, including having a backup channel just in case. so that continuous service is not interrupted

The reason why the BOT started pushing Virtual Bank is because it wants to support groups that have not yet accessed traditional financial services, such as those with low incomes. No regular income or no financial history with financial institutions

The Virtual Bank can use other information to evaluate, such as trading history on online platforms. or other alternative information for credit assessment and approval

Another reason is that Virtual Bank will add more options. convenience and create a good experience for service users, which the BOT will examine until the system and technology used Is it good enough and suitable for being a Virtual Bank as required by the BOT?

The last story is Stimulate competition in the Thai financial market to be alert. and compete with each other to develop their own services more

However, the BOT continues to supervise and discusses the risks of entering virtual banks which affect financial stability And it is something that the BOT does not want to see, for example

– Came in to accelerate the expansion of the business too quickly. Especially the interest on deposits that are too high. until the business cannot bear

– Encouraging over-indebtedness Until aggravating the problem of domestic household debt

– Facilitating benefits for their own business, for example, those who already operate in Thailand request to set up a Virtual Bank and force partners or monopolies to use the Virtual Bank of the business only.

Summary of the Virtual Bank in the version of the BOT is simple.
Commercial banks that do not have branches or ATMs and provide services through digital systems. by using new information to help consider credit support savings and product development