Thailand-based energy conglomerate Gulf Energy Development Plc (Gulf) plans to embark on a virtual bank journey with partners, including telecom giant Advanced Info Service Plc (AIS) and Krungthai Bank Plc (KTB), Thai media The Nation reported on Wednesday.
The joint venture will apply for a virtual bank licence with the Bank of Thailand (BOT) with an initial investment of 5 billion baht, Gulf’s chief executive officer Sarath Ratanavadi was quoted as saying.
The central bank had announced earlier this month that it would limit the issuing of licences to only three virtual banks to ensure the financial system’s stability could be maintained as new financial services are offered through digital channels.
In a statement dated March 5, BOT said interested applicants can submit their application for a virtual bank license to the central bank from March 20, 2024 to Sept 19. The central bank is expected to announce successful applicants within the first half of 2025.
These applicants must then undertake preparations across various aspects, including IT systems and risk management tools, to commence virtual bank operations within 1 year from the date of approval, the central bank added.
Sarath expressed confidence that the joint venture will harness its expertise to drive the virtual bank business forward, with technology know-how provided by Gulf, AIS’s large user base of over 45 million phone numbers, and KTB’s expertise in the financial industry.
He also said that the BOT’s regulations on virtual banks will help maximise access to loans at reasonable interest rate for users in Thailand, while maintaining the security of digital transactions, which Gulf has appropriate technology to support.
“Clients looking to borrow from 10,000 baht ($275) to 100,000 baht ($2750) will find it easier to do so [via virtual banks],” Sarath was quoted as saying. “The trend is moving toward digital, AI and cloud platforms, and we plan to build a new data centre next year, as well as extend our reach in digital infrastructure.”
Bloomberg reported on Wednesday that Charoen Pokphand Group is also vying for the country’s new virtual bank licences as the Bank of Thailand opens applications.
True Money, a financial technology arm of CP Group, and its partners including Ant Group are in the process of preparing a bid, said Suphachai Chearavanont, the group’s chief executive officer.
“We have seen the greater importance of advanced technology in the financial industry,” Suphachai was quoted as saying. Gaining a “virtual bank license will help us reach out to a large group of consumers,” he said.
According to Bloomberg, Gulf Energy and CP Group will join SCB X Pcl, which controls the country’s largest commercial lender by market capitalization, in their bids. SCB X plans to announce a new partner from China this week to apply for the new virtual banking permit, its CEO Arthid Nanthawithaya said.
According to The Nation, Thailand now has 17 conventional commercial banks.
Elsewhere in Singapore, the Monetary Authority of Singapore gave out four digital bank licenses in December 2020.
Meanwhile in Malaysia, Bank Negara awarded five digital banking licenses in April 2022 to successful applicants.