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August 23, 2016

Thailand: New Regulations for Financial Institutions on Accepting Deposits and Receiving Money from the Public

The Thai government recently promulgated new regulations for financial institutions on accepting deposits or receiving money from the public. The regulations aim to enhance the security and stability of these processes, and therefore improve the credibility of commercial banking business.

Under Bank of Thailand Notification SorNorSor 7/2559, financial institutions must set up mechanisms to ensure effective and accurate identification and verification of their customers, commonly referred to as “Know Your Customer” (KYC).

The regulations impose strict requirements and restrictions on accepting deposits of money or receiving money from the public via electronic means. This service is now restricted to natural persons, and financial institutions that provide this service must ensure that their e-KYC is available and effective. Risk management must also be improved.

The standard of the identification and verification process must be the same as services rendered to customers who are physically present at banks. If customers are not available in person, financial institutions must use electronic devices, such as video conferencing equipment, to enable bank officers to interview and observe a customer’s behavior on a real-time basis.

If financial institutions accept deposits of money or receive money from the public through a virtual teller machine, kiosk, computer, or other electronic device, they must examine the information and identification documents of their customers by using a smart card reader. They may use the government’s identification and verification system or its fingerprint verification system, together with their smart card reader, to be more accurate.

In addition, if financial institutions accept deposits of money or receive money from the public through applications prepared by themselves and run on the electronic devices of their consumers, including mobile phones, they must use the government’s identification and verification system together with its fingerprint verification system.

Financial institutions have until the end of this year to improve their internal systems, standards, and risk management. As these changes come into effect, both commercial banks and their customers will need to be prepared for a much higher level of scrutiny when financial institutions accept deposits and receive money from the public.

If you have any questions about these regulations or other banking-related matters, please contact Cynthia M. Pornavalai at [email protected] or +66 2653 5559.