Tight rules limit aggressive lending
Mr Weerapat said a virtual bank's business model requires Bank of Thailand approval, with close supervision likely to curb aggressive loan growth in the first five years.
Close supervision and monitoring by the Bank of Thailand would obstruct virtual banks from expanding their loan portfolios aggressively in the first five years of operations, even though they are likely to offer small-ticket, unsecured personal loans below 10,000 baht, analysts say.The rollout of Thailand's virtual banks serves the central bank's goal of enhancing access to funding for underserved and underbanked customers while creating fair competition without leading to high levels of borrower indebtedness, said Weerapat Wonk-urai, an analyst at CGS International Securities (Thailand).
Following the launch of Clicx Bank earlier this month, the two remaining virtual banks are expected to commence operations in the second half of the year to fulfil the central bank's financial inclusion objective.
Given their low-overhead model, virtual banks are well positioned to gradually drive market competition and spark innovation that better meets users' needs at lower costs.
