According to central bank governor Vitai Ratanakorn, the three successful applicants for virtual bank licences are in the process of complying with regulatory requirements set by the regulator and the Finance Ministry, reports the Bangkok Post.
Although the central bank previously required operations to commence in June, he said it was allowing some flexibility, permitting a delay of two to three months.
In June last year, the regulator announced the three successful applicants to establish the country’s first batch of virtual banks.
These entities are required to follow the Finance Ministry’s notification on the rules, procedures and conditions for virtual bank licences, issued on Feb 20, 2024.
The winners are ACM Holding Co (TrueMoney), backed by the Charoen Pokphand (CP) Group; Krungthai Bank, in collaboration with Advanced Info Service Plc and PTT Oil and Retail Business Plc; and the SCB X consortium, which includes South Korea’s KakaoBank and WeBank.
Suphachai Chearavanont, senior vice-chairman of CP Group, said recently the group’s virtual bank dubbed Ascend Bank plans to launch services at the end of June.
CP All, a subsidiary of CP Group, is working to align its subsidiaries’ business structures with regulatory requirements.
Under the framework, virtual bank applicants must consolidate financial businesses under their control into a single group, separate from non-financial (real sector) operations.
CP All is scheduled to hold an extraordinary shareholders meeting on May 29 to decide whether to approve the integration of three subsidiaries into the virtual bank. These subsidiaries are Counter Service Co, Thai Smart Card Co, and SET-listed CP Axtra (CPAXT).
CP All holds a 100% stake in both Counter Service and Thai Smart Card, providers of bill payment and e-money services, respectively, and a 60% stake in CP Axtra. These businesses overlap with the proposed virtual bank operations, and the regulator wants to ensure effective risk supervision of financial activities and prevent conflicts of interest among affiliated businesses.
During a recent board meeting, CP All’s independent directors opposed the transfer of the three subsidiaries into the group’s virtual bank structure.
The company said the proposed transfers were based on the central bank’s regulations and recommendations.
The central bank later clarified virtual bank regulations, noting it allows applicants to adopt various approaches to comply with regulatory requirements that aim to prevent conflicts of interest among affiliated businesses.
"ACM Holding is expected to be able to comply with the conditions. We outlined several approaches for them to proceed, such as reducing shareholding in financial businesses or returning a financial business licence that is not materially significant," said Mr Vitai.
To meet the ministry’s objectives, he said applicants may adopt several approaches, such as transferring relevant financial business units ‒ without necessarily restructuring entire entities ‒ into the same group as the virtual bank.
Other options include reducing shareholdings in financial businesses to relinquish controlling power, surrendering licences for non-material financial activities, taking alternative actions aligned with regulatory objectives, or submitting applications without restructuring, supported by justifications for consideration.
All applicants are required to submit supporting documents and evidence to both the central bank and the Finance Ministry for joint evaluation of the suitability of granting licences.
If ACM Holding is unable to meet the criteria and withdraws its application, the regulator will grant licences to only two applicants in this round, said Mr Vitai.