You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

September 20, 2024

Thailand Issues Virtual Bank Supervision Regulation

Subscribe to Updates

On September 12, 2024, the Bank of Thailand (BOT) Notification Re: Virtual Bank Supervision Criteria took effect. According to this notification, virtual banks must adhere to standards for traditional commercial banks, along with additional requirements tailored to address virtual banks’ digital nature and corporate structure.

Specific Requirements

The concepts of supervision remain unchanged from the consultation paper titled “Criteria for Supervising Virtual Banks”. Some of the key additional provisions and details on supervision criteria relate to the following:

  • Financial business groups: The notification identifies virtual banks as financial businesses, subject to the BOT’s regulations on financial business group supervision. If a virtual bank is a part of another financial institution’s financial business group, the virtual bank must be under a solo consolidated group. After the “initial phase” (see below), other financial institutions and companies within the financial business group are prohibited from extending credit to or engaging in transactions similar to lending activities with the virtual bank.
  • Capital fund requirements: If other financial institutions’ investment in a virtual bank increases the capital fund in the financial system beyond a safe level and this poses a risk to other financial institutions, the BOT may order the relevant financial institution to maintain capital funds as the BOT deems appropriate.
  • Service channels and outsourcing: Virtual banks must provide services solely through digital channels, except when necessary. For example, with the BOT’s approval, a virtual bank may use other commercial bank electronic branches via an ATM pool system, use a banking agent to serve customer needs for cash, or occasionally provide on-site services.

Initial Phase

The “initial phase” runs from the date that the virtual bank commences its operations until it receives the BOT’s approval to become fully operational. During this period, certain BOT supervisory requirements are relaxed as follows:

  • Governance: Virtual banks in the initial phase may request permission from the BOT to appoint a manager or person with authority from another financial institution to oversee their operations. The BOT will consider each request based on the reasons for it, the necessity of the proposed appointment, and the measures that will be taken to prevent conflicts of interest.
  • Stress test: Virtual banks in the initial phase can utilize either self-developed scenarios or supervisory scenarios when conducting stress tests.
  • Recovery plan: Virtual banks in the initial phase are not required to submit a recovery plan (i.e., a plan that identifies mechanisms to deal with financial stresses to the bank or its financial group) to the BOT.

For more information on Thailand’s regulations pertaining to virtual banks or any other financial technology matters, please contact Athistha (Nop) Chitranukroh at [email protected], Pornpan Wichawut at [email protected], or Rujaporn Paritsantik at [email protected].

Related Professionals

Industries

Fintech

Technology

Practices

Banking and Finance

Location

RELATED INSIGHTS​ 

July 17, 2026
On July 11, 2026, media reports conveyed key messages from Bank of Thailand (BOT) Governor Vitai Ratanakorn’s announcement of a sweeping regulatory crackdown on grey capital activities. The measures target high-value cash transactions, gold trading, and stablecoin flows, with new requirements set to take effect in the fourth quarter of 2026. The initiative aims to prevent financial institutions from facilitating shadow economy activity, money laundering—particularly through stablecoins—and capital flight, through enhanced compliance obligations on commercial banks across multiple transaction channels. Expanded Cash Controls Close the Deposit–Withdrawal Circuit New fourth-quarter guidelines will require individuals depositing THB 5 million or more in cash to formally verify the source of their funds. This builds on restrictions introduced in April 2026, which required anyone withdrawing 5 million baht or more in cash to provide their bank with verified commercial justification for why electronic transfers or checks could not be used. That initial measure caused high-value physical cash withdrawals to drop by 35 percent nationwide. The upcoming deposit-side requirement closes the circuit on large cash movements. The BOT is also assessing tracking mechanisms for high-value banknote swaps, specifically targeting individuals seeking to exchange large volumes of THB 1,000 notes into smaller THB 100 or THB 500 denominations without clear business justification. Governor Vitai emphasized that these measures require continuous deployment of multiple parallel strategies rather than short-term fixes. Tightened Bullion Reporting Frameworks Restrict Money Laundering Channels The BOT has also tightened reporting frameworks for gold trading to close money laundering loopholes and shield the Thai baht from speculative bullion volatility. Regulators identified a recurring pattern in which buyers purchased large quantities of gold through digital applications in the morning and then made same-day physical withdrawals from retail gold shops in the afternoon. Gold shops are reminded of their duties to flag and report cash
Read More
July 16, 2026
Thailand’s Office of the Personal Data Protection Committee (PDPC) published a series of draft guidance documents for public consultation on July 7, 2026. Issued under the Personal Data Protection Act B.E. 2562 (2019) (PDPA), the drafts address a range of compliance issues and offer insight into the regulator’s current enforcement priorities. This article examines two of those drafts: one on lawful bases for processing personal data, and another on marketing and direct marketing. Together, they reflect the Office of the PDPC’s evolving expectations on lawful-basis selection, accountability, and the use of personal data in marketing. Organizations operating in Thailand should assess the practical implications now, before the guidance is finalized. Lawful Bases: A Structured Selection Process The draft guidance on lawful bases introduces a systematic five-step process for selecting an appropriate lawful basis for each processing activity. Organizations are expected to: Identify the processing activity involved. Assess the appropriate lawful basis. Evaluate whether the data is necessary for the processing. Conduct a legitimate interest assessment (LIA) where applicable. Ensure transparency through privacy notices. The guidance provides practical explanations and examples for each lawful basis under section 24 of the PDPA—including archiving, research, statistics, vital interests, contractual necessity, legal obligation, public task, legitimate interests, and consent—as well as the bases applicable to sensitive personal data under section 26. The aim is to promote more consistent and accurate lawful-basis selection across public- and private-sector organizations. A recurring theme throughout the guidance is that organizations should select the lawful basis that most accurately reflects the actual purpose and circumstances of the processing activity. The guidance cautions against treating consent as a default or catch-all basis where another lawful basis is more appropriate. For processing based on legitimate interests, organizations should conduct and document an LIA. Processing involving sensitive personal data may require
Read More
July 14, 2026
Thailand’s National Broadcasting and Telecommunications Commission (NBTC) has published guidelines establishing a risk-based framework for the responsible use of artificial intelligence by telecom licensees. Released on July 2, 2026, the Guidelines on the Use of Artificial Intelligence for Telecommunications Services address governance structures, ethical principles, lifecycle management, and consumer protection obligations. Scope and Legal Context The nonbinding guidelines apply to holders of telecom business licenses under Thailand’s telecom licensing laws, but only with respect to the use of AI in providing licensed telecom services. Entities without such licenses are not directly subject to the guidelines, though they may be affected as third-party AI solution providers to licensees. The guidelines supplement and should be read alongside existing laws, including the Cybersecurity Act, the Personal Data Protection Act (PDPA), the Computer Crime Act, and the NBTC Notification regarding Measures to Protect Telecommunications Service Users’ Rights Regarding Personal Data, Privacy Rights, and Freedom of Telecommunications, as well as forthcoming AI governance legislation being drafted by the ETDA. AI Governance Structure Licensees are expected to establish committees, working groups, or designated officers at both policy and operational levels to set strategic direction for AI use, formulate governance policies and tools, and oversee risk management. Roles, responsibilities, and accountability should be clearly defined for all personnel across every stage of the AI lifecycle—including for third-party AI solution providers and outsourced service providers, whose obligations should be explicitly documented in service agreements. Core Principles The guidelines identify six core principles that licensees should adhere to when deploying AI: Compliance with laws, ethics, and international standards: AI should respect privacy, dignity, and human rights, and content filtering for inputs and outputs should be considered. For example, the AI should not be designed and developed to be used in generating false information, supporting illegal activities, or causing
Read More
July 10, 2026
Vietnam has taken a significant step in regulating its e-commerce sector with the issuance of a new decree guiding the country’s recently enacted Law on E-Commerce. Decree No. 248/2026/ND-CP, issued on June 30, 2026, and taking effect the following day, addresses mandatory platform policies, registration requirements for offshore platforms, additional obligations on platform operators, and market access conditions for foreign investors. Mandatory Policy Contents The decree sets out detailed guidance on the required contents of various platform policies, covering pricing, payment, display priority, livestream sales, delivery, returns, method of service provision, and service termination and refunds. Clarification of Obligations for Platform Operators The decree provides clarification of the obligations applicable to platform operators. Notably, intermediary e-commerce platform operators with online ordering functions must: Collect specific information to implement electronic identity verification of sellers; Cooperate with regulators by reporting online through the state e-commerce management system and by blocking, suspending, or removing content upon request of a competent authority; Maintain a mechanism to store contract data, including price, product or service information, and parties’ information, for at least three years from the date of contract conclusion; and If qualifying as a “large digital platform” under consumer protection law, maintain an online system for receiving and handling complaints and requests, and comply with enhanced content-removal requirements. Registration Requirements for Offshore Platforms Offshore e-commerce platforms, whether direct-sales, intermediary, social-network-based, or integrated, that conduct e-commerce activity in Vietnam must register with the Ministry of Industry and Trade if the platform: Allows Vietnamese-language selection; Uses a “.vn” domain; or Reaches 100,000 or more transactions with Vietnam-based buyers within a calendar year. Notably, the registration requirement now captures not only traditional intermediary platforms, but also direct-sales platforms. Foreign Investment Conditions Foreign investors holding a controlling interest in an intermediary e-commerce platform, a social media platform
Read More