Thailand is set to introduce virtual banking services by 2025, with the Bank of Thailand (BOT) planning to issue three initial virtual banking licenses. This initiative aims to enhance financial inclusion by serving the unbanked and underbanked populations in the country. Companies interested in obtaining these licenses must meet a minimum capital requirement of 5 billion baht, which will increase to 10 billion baht in the future. Notable firms expressing interest include VGI, Bangkok Bank (BBL), Siam Commercial Bank (SCB), CP Group, and Gulf Energy. The framework for applications took effect on March 19, 2024, and the operations of the first licensed virtual banks are expected to commence in 2025. The BOT's goal is to complement traditional banks rather than replace them, fostering competition that may push existing banks to enhance their digital services.
In parallel, Thailand will distribute 145 billion baht (US$4.2 billion) of its 'digital wallet' handout programme earlier than scheduled to support vulnerable groups, as stated by Deputy Finance Minister Julapun Amornvivat on September 9, 2024. The government has prepared a total of 450 billion baht (US$13.29 billion) for the programme, aiming to transfer 10,000 baht to 50 million Thais. The rollout was initially planned for the last quarter of 2024, but the urgency to support the economy has prompted an earlier distribution. As of now, 32 million people have registered for the programme, which will provide funds via a smartphone application. Critics, including former central bank governors, have labeled the handout scheme as fiscally irresponsible, while the government insists it is necessary for economic stimulation, projecting a growth of 2.6% for the year.
On October 19, 2024, Deputy Finance Minister Julapun Amornvivat announced that non-smartphone users will also be able to register for the 10,000-baht handout at state banks starting in November. This initial phase targets 14.5 million vulnerable individuals and aims to boost economic activity further. The second phase of the handout will also provide 10,000 baht, although details on distribution are still pending. The Economic Stimulus Policy Committee is set to meet by the end of October to discuss additional measures. Nath Vongphanich of the Thai Retailers Association has suggested reviving the Shop Dee Mee Khuen program to stimulate spending during the high season, potentially generating over 100 billion baht in economic circulation.
In a recent development, on November 19, 2024, Prime Minister Paetongtarn Shinawatra approved a new cash benefit policy that will provide 10,000 baht to Thais over the age of 60 before the upcoming Chinese New Year. This initiative is expected to benefit approximately 4 million elderly citizens, costing the government around 40 billion baht. This follows the first phase of the digital wallet programme, which provided 10,000 baht to 14.5 million disabled individuals and state welfare cardholders in late September. The next phase of the cash handout is anticipated to occur between April and June 2025, pending the completion of a digital payment system. Additionally, a three-year moratorium on interest payments for mortgage and car loans was also agreed upon to alleviate financial burdens on citizens.
As the economy continues to recover, the BOT's initiative could play a crucial role in reshaping the banking sector and addressing the needs of underserved communities in Thailand. The introduction of virtual banking is seen as a significant step towards modernizing Thailand's financial landscape and improving access to banking services for all citizens.