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Open Competition

Open for both incumbent and new players to provide and innovate financial services

Policy Stances
  • What we wish to see: Incumbent and new players can innovate and offer financial services that better serve the needs of consumers, improve efficiency, and help close the financial access gap without leading to over-indebtedness.
  • What we do not wish to see: Business operators offering the same financial services but are not subject to comparable supervisory regulations; are not regulated in line with their risks posed to the system; and such business undertakings may pose risks to financial stability, depositors, or consumers at large; or may lead to monopoly or unfair market dominance e.g. using deposits or leveraging their customer base to directly compete with the real sector.

Introduce Virtual Bank as a New Player

Both new and incumbent players are welcome to establish a virtual bank. The objective of the virtual banking license is to foster competition in developing financial services, promote innovations that meet consumer needs, as well as improving suitable access for the retail sector and SMEs. However, this should not grant market dominance leading to monopolization. A virtual bank is expected to be more agile and have lower operating costs than a traditional bank. This is a combination of the virtual bank policies of South Korea, Hong Kong, and Singapore, which aim to promote competition and stimulate innovation, together with those of Malaysia and the Philippines, which aim to improve the SMEs and retail sector’s financial access.

Virtual Bank Characteristics

  1. Subject to the same scope of business as a traditional bank, allowing it to offer services to all consumer segments and compete with other service providers while coming under the same risk-based supervisory framework as traditional banks, namely in the areas concerning risk management, prudential measures, and fair treatment of customers. This is consistent with most international practices in licensing and supervision.

  2. Locally incorporated with a headquarter or parent company in Thailand to enable the BOT to conduct supervision through its presence in the country. This is consistent with the licensing frameworks of virtual banks in Malaysia and the Philippines, and those of digital full banks in Singapore.

ExampleObjectivesScope of BusinessLimit on Number of Licenses
CompetitionInnovationFinancial accessFull bankWholesale bank
Hong Kong1
South Korea2
1 Retail and SMEs focused
2 Lending to large businesses is not allowed
3 Lend to SMEs and large businesses, and accept deposits from wholesale customers
4 Unserved and underserved segments

The BOT will publish a consultation paper concerning guidelines on virtual bank licensing framework within the first half of 2022.

Increase Flexibility for Incumbents

Allow more flexibility regarding the business scope of financial institutions so that the existing players can better compete, innovate, and meet consumer needs. For instance, the investment limit on FinTech investment, excluding that in digital assets—currently at no more than 3 percent of the bank’s capital—will be lifted for subsidiaries and affiliates within a banking group.

Support the Roles of NBFIs and SFIs

Support the Roles of Non-Bank Financial Institutions (NBFIs) and SFIs to efficiently bridge the gaps in the financial system and improve services.

Expand the Scope of Business for NBFIs

Expand the scope of business for NBFIs with a single line of business (monoline NBFIs). Some examples include:

  • Allow e-Money service providers to operate as escrow agents and provide identity verification and authentication services (Identity Provider: IdP in the electronic-Know Your Customer (e-KYC) process).

  • Allow Money Transfer (MT) and Money Changer (MC) operators to offer a broader range of services and higher transaction amount limits and provide electronic services that utilizes technologies to improve efficiency and lower costs.

  • Plan to revise non-bank MT/MC licenses to allow for broader scope of businesses and services to better serve retail customers and SMEs.

Support the Roles and Functions of SFIs

Collaborate with other relevant agencies to assist SFIs in closing the gaps unmet by existing market mechanisms or other infrastructures, but not in a manner that encourages them to directly compete with private players or other SFIs. Moreover, support on personnel capacity building and sharing common infrastructure among SFIs will enhance their role in closing such gaps, which should incur the least possible fiscal burden.


Both new and incumbent financial service providers may consult the BOT, on a case-by-case basis, concerning other banking business models (which are not a virtual bank), or other financial businesses under the BOT’s supervision.