State-owned Krungthai Bank (KTB) has partnered with leading telecom operator Advanced Info Service (AIS) on a plan to jointly invest in a virtual bank, aiming to serve both existing and new customers, says KTB president Payong Srivanich.
He said the bank and AIS signed a memorandum of understanding on the collaboration. Mr Payong expects the Bank of Thailand to announce virtual bank regulations soon.
He said the partnership reflects the planned business expansion of both KTB and AIS.
A virtual bank has no physical branches, with only a headquarters, offering regular banking services online. In some countries this licence is called a pure digital bank licence.
Thailand's central bank has been drafting licensing guidelines and studied virtual bank models in several countries, including Singapore.
The Bank of Thailand indicated earlier it wants virtual banks to be a tool to enhance financial inclusion and keep pace with consumer needs in the digital age.
Central bank deputy governor Ronadol Numnonda said earlier that the virtual bank licensing guidelines would be in line with the economy and market environment.
The Bank of Thailand will not allow financial institutions with commercial banking licences to apply for virtual bank licences because it wants such licences to be focused on new unbanked and underbanked customers, not existing customers.
However, other entities, which are under a commercial bank group and have no banking licences, can apply for the virtual bank licences.
Executives of some commercial banks said earlier they were interested in applying for virtual bank licences, pending the published regulations.
The banks expect licensing will allow them to explore greater business opportunities in the digital era.
KTB is known for its Pao Tang mobile app, which was developed for the government's welfare services and stimulus schemes during the pandemic. There are around 40 million users of the app.
Recently Krungthai Card Plc, a non-bank business under KTB, unveiled its plan to offer personal loans via the Pao Tang mobile application this year.
In a separate matter, Mr Payong said KTB is still focused on supporting vulnerable groups of customers amid the trend of rising interest rates.
Local banks have recently raised both loan and deposit rates, in line with the central bank's rate hikes last year.
