Thailand May Grant New Licenses to Overseas Banks in 2013

March 26, 2009 by Prakash Dhawan · Leave a Comment
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 Bank of Thailand may start granting new banking licenses to overseas lenders in 2013 to increase competition in Southeast Asia’s second-largest economy. The proposal is part of a new financial development plan that’s awaiting approval from the finance ministry, Chodechai Suwanaporn, director of the ministry’s fiscal policy office, said at a seminar in Bangkok today.

The nation is moving toward liberalizing its financial system even as the global credit crisis has led to the collapse of Lehman Brothers Holdings Inc. and a government bailout of Citigroup Inc. Thai banks remain strong because they hold fewer toxic assets and due to their reliance on local savings, Bank of Thailand Governor Tarisa Watanagase said on March 24.

“Those who don’t have a presence in Thailand can apply for licenses,” Chodechai said. “If we think they fit with our plan, we will allow them to do business in Thailand.”

The central bank may allow overseas lenders who already have operations in Thailand to add branches as early as this year under the plan, which is expected to be implemented from 2009 to 2013, he said. Overseas banks including New York-based Citigroup and London-based HSBC Holdings Plc are currently limited to a single branch each.

New licenses for restricted services including micro finance, Islamic banking and trust banks may be granted as early as 2011 to increase access and offer more products in the local market, he said.

“We want to fill in the gap in the Thai financial system,” Chodechai said. Thailand has 14 commercial banks, including Bangkok Bank Pcl, Siam Commercial Bank Pcl and Kasikornbank Pcl, while Indonesia has about 128 commercial banks.

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