The Bank of Thailand (BOT) has opened a public comment period on their consultation paper titled “Criteria for Supervising Virtual Banks” from March 19, 2024, to April 17, 2024. The consultation paper reveals that the BOT intends to apply traditional commercial bank supervisory standards to virtual banks. However, the BOT also explains that the wholly digital nature of the services offered by virtual banks necessitates additional regulatory supervision. Additional Supervisory Criteria for Virtual Banks Financial business group: If a virtual bank is within the same financial business group as other financial institutions, its parent company must structure the virtual bank to be under its own sole consolidated financial business group. After the virtual bank has undergone the “restricted phase” in its initial years of operation (see below), other financial institutions within the group are prohibited from extending credit to or engaging in transactions similar to lending activities with the virtual bank. Shareholding structure: If the increase in the financial institution system capital is higher than the actual capital injection resulting from the bank’s shareholding structure, the BOT aims to issue an additional regulation to supervise the capital of the virtual bank and financial institution system to prevent double counting. Operational risk: Virtual banks must not use a trademark or logo that bears resemblance to or implies association with other financial institutions or financial institution groups. Governance: Virtual banks must have at least one director and chief technology officer (CTO) with at least three years of experience in IT or digital service. Additionally, the CTO must work full-time for the virtual bank and may not be an employee of another legal entity. Restriction on related lending and related-party transactions: Virtual banks must obtain prior unanimous approval from their boards of directors before engaging in transactions with major shareholders or businesses

Thailand’s Ministry of Finance has issued the Notification re: Criteria, Methods and Conditions for Applying for and Issuing Licenses to Operate Virtual Bank Business, which was published in the Government Gazette on March 4, 2024. This notification opens an opportunity for qualified experts in technology, digital services, and diverse data usage fields to apply for virtual bank licenses to provide financial services through new digital channels. The main goal is to serve the financial needs of target groups that may not have received sufficient or tailored financial services from the traditional banking system. Licensing Timeline Application submission period: 6 months (March 20–September 19, 2024). Announcement of successful applicants: Mid-2025 (approx. 9 months–1 year from the end of the submission period) After the announcement, successful licensees must demonstrate their readiness to commence virtual bank operations within 1 year (extendable for up to 1 additional year) via the following: Having paid-up registered capital of THB 5 billion and plans to increase the paid-up registered capital to at least THB 10 billion after the initial business period; Establishment or adjustment of a financial business group; Procurement of human resources, IT systems, and relevant risk management tools. Number of Licenses to be Issued No written or specified limit, subject to the discretion of the Bank of Thailand (BOT). Key Qualifications Applicants must have the following: Experience and resources to support virtual banking operations according to the business model and plan. Expertise and experience in conducting business that utilizes technology and provides services through digital channels. Experience demonstrating the ability to obtain, access, manage, and utilize data, including development of systems or data connections to facilitate user activities, allowing them to use their data to conduct transactions with other providers. Criteria In assessing applicants’ qualifications for a virtual bank license, the BOT will consider

Thailand has made its draft Platform Economy Act (the “Draft PEA”) available to relevant entities in certain industries. The Draft PEA aims to regulate and standardize digital platform service business operations and protect consumers and other stakeholders. Once the Draft PEA becomes law, the Royal Decree on the Operation of Digital Platform Service Businesses that are subject to Prior Notification B.E. 2565 (2022) and the relevant provisions under the Electronic Transactions Act B.E. 2544 (2001), as amended, will cease to have effect. The key provisions of the Draft PEA are summarized below. Definitions The definitions of the key terms under the Draft PEA are substantially similar to the definitions of the key terms under the royal decree mentioned above. According to the Draft PEA, “digital platform services” refers to the provision of electronic intermediary services that manage data to facilitate connection, through computer networks, between business users, consumers, or users, regardless of whether remuneration is charged. Exemption The Draft PEA does not apply to digital platform services (DPSs) that are regulated by specific laws and have rules guaranteeing transparency and fairness, or that follow operational standards no less stringent than those required in the Draft PEA. Nonetheless, the Electronic Transactions Development Agency (ETDA) can request or link data relating to exempted DPSs from the relevant supervisory authorities. Extraterritorial Effect Offshore DPSs with certain characteristics are also subject to the obligations under the Draft PEA and will have to appoint a coordinating person in Thailand. However, offshore DPSs will not have to establish a business in Thailand. General Responsibilities and Obligations The Draft PEA sets out the following requirements: DPSs with (1) at least THB 100 million (approx. USD 2.8 million) in annual revenue from providing the DPSs in Thailand before deducting expenses, or (2) more than 10,000 monthly users

The Bank of Thailand (BOT) has issued a new notification to sustainably address Thailand’s household debt problems by establishing responsible and fair lending requirements for lending service providers throughout their lending journey. Notification No. SorKorChor. 7/2566 Re: Provision of Responsible and Fair Lending was announced on December 21, 2023, and took effect on January 1, 2024. The lending service providers this notification applies to include both commercial banks and nonbank business operators (e.g., personal loan business operators, nano-financing business operators, and credit card business operators). The key principle of this notification is to provide criteria for responsible and fair lending that supplement market conduct principles, covering eight areas in the debt cycle: Lending product development. Service providers must offer lending products that are suitable to customers’ needs and repayment capabilities, avoiding encouragement of excessive debt. Loan interest rates should align with the borrower’s risk profile and credit characteristics (risk-based pricing) to ensure fair contract conditions. Advertising. Service providers must prepare and control advertisements with “correct and clear” content, presenting complete and comparable conditions, interest rates, and various fees to customers. The advertisements should not encourage excessive debt, enabling customers to make informed decisions and promoting financial discipline. Sales. In the selling process, service providers must ensure that customers receive complete, accurate, and unexaggerated information that facilitates appropriate consideration of decisions based on a correct understanding of the product or service. Products should also align with customers’ purposes or needs for fund utilization, avoiding encouragement of excessive debt. Consideration of debt repayment ability (affordability). Service providers must be conscientious in considering customers’ debt repayment ability, taking into account all obligations and residual income. Promotion of discipline and financial management. Service providers must provide important information and warnings to debtors, including regular reminders to promote responsible borrowing. Helping debtors with persistent debt.