11 July 2024

The Bank of Thailand started accepting applications for the opening of virtual banks in Thailand today, from companies or other business entities which have registered in advance.

More than 200 representatives from about 100 companies have shown interest in investing in virtual banks, the first of their kind in the country.

According to the Yuanta securities company, four business groups are interested in the new business venture.  They are the Krung Thai Bank in cooperation with Advanced Info Service (AIS) and Gulf Energy Development Company, Siam Commercial Bank in a joint venture with the Kakao Bank of South Korea, Jaymart Group Holdings and KB Financial Group from South Korea and the CP Group in joint venture with Ascend Group.

Applications are open for six months and it will take about nine months for the Bank of Thailand and Finance Ministry to scrutinise all the applications. Those who pass the screening process will be given one year to prepare to set up their virtual banks, which are expected to become operational in mid-2026.

Sarath Ratanavadi, CEO of Gulf Energy Development Company, said that the company and its partners, Krung Thai Bank and AIS, have agreed to invest an estimated at 5 billion baht in the development of technology to support the virtual banks.

Thanawat Lertwattanarak, CEO of J Ventures Company, said that the virtual banks should be more flexible than commercial banks in providing funding for customers who do not have access to funding from commercial banks, which is a big challenge for virtual banks.

Investors must have high registered capital, estimated at 5-10 billion baht, to set up a virtual bank and, hence, small Fintech companies interested in the project must join with large companies.