Bangkok: The Bank of Thailand (BOT) has detailed the criteria for issuing virtual bank licenses, emphasizing the need to separate financial activities from real sector businesses to mitigate risk and prevent conflicts of interest among affiliated entities.

According to Thai News Agency, Ms. Chayawadee Chaiyanan, Assistant Governor for Corporate Relations and Spokesperson of the BOT, explained that the process for granting licenses to branchless commercial banks, or Virtual Banks (VB), to the three applicants will adhere to the Ministry of Finance's announcement. This announcement, which outlines the criteria, methods, and conditions for applying for and issuing VB licenses, was made public on February 20, 2024.

The announcement mandates that applicants aiming to establish a Value Bank (VB) consolidate all businesses holding financial licenses under their control into a single business group, distinctly separate from non-financial sector businesses. This structure aims to ensure effective risk management and prevent VBs from granting undue advantages to affiliated businesses, such as exceeding loan limits or offering transactions with preferential pricing.

Applicants have several options to align with the Ministry of Finance's objectives, including transferring financial business operations to the VB group, reducing shareholding to avoid control, returning minor financial business licenses, or undertaking other actions in line with the announcement's goals. Alternatively, applicants can apply without restructuring, providing justifications for this approach. All necessary documentation must be submitted to the BOT and the Ministry of Finance for joint assessment of the suitability of granting a VB license.