Thailand’s virtual banking sector faces competition for licences

Thailand’s emerging virtual banking sector is seeing intense competition as the number of applications has surpassed the available licences. The Bank of Thailand (BoT) announced it received five applications for virtual banking licences before the deadline, with plans to grant a maximum of three licences.

The successful bidders are expected to be announced by mid-2025. The BoT has not disclosed the identities of the applicants.

Across Asia, regulatory officials are increasingly permitting virtual banking services to enhance financial accessibility. These new digital lenders face significant challenges in achieving profitability, competing with traditional banks that are expanding their digital capabilities.

Several prominent groups had shown interest in the licences before the deadline. SCB X, Gulf Energy Development, and Charoen Pokphand Group led the way in expressing their intent to apply. Additionally, WeLab, a digital bank based in Hong Kong, teamed up with Lighthub for a joint application, while Singapore-based Sea Ltd partnered with Bangkok Bank for their bid.

In March, Charoen Pokphand Group, led by billionaire Dhanin Chearavanont, announced a planned bid in collaboration with China’s Ant Group. Gulf Energy, supported by tycoon Sarath Ratanavadi, is partnering with Krung Thai Bank and PTT for their application.

SCB X formed a consortium with China’s WeBank and South Korea’s KakaoBank, according to their March statement, reported Bangkok Post.

The BoT will assess the qualifications and capabilities of all applicants before recommending the qualified operators to the finance minister for final approval.

In related news, the BoT may revise its monetary policy if economic changes in the landscape and structural challenges significantly lower its long-term potential growth, disclosed BoT Deputy Governor Alisara Mahasandana. This follows governmental pressure on the central bank to decrease interest rates.

Alisara, speaking from the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, highlighted that while the bank’s Monetary Policy Committee is receptive to all input, it needs to balance immediate and longer-term economic elements when establishing rates.