Mrs. Rung Mallikamas, Assistant Governor Financial Institution Policy Group The Bank of Thailand (BOT) revealed in a Media Briefing event titled ‘Guidelines for Supervision of Financial Business Groups of Commercial Banks Doing Digital Businesses’ that the Bank of Thailand has now revised regulations on supervision of commercial bank groups (BOT). Wed) who do business related to digital assets To make the commercial bank group more flexible in doing business and in accordance with changing risks The important things are:
1. Cancel the investment ceiling in the FinTech business of the commercial banks. from previously set at 3% of the capital To allow commercial banks to make more use of financial technology (FinTech) because the benefits are clear. Moreover, commercial banks have more experience in FinTech investment and regulators have some level of risk mitigation.
2. to companies in the commercial bank group Able to invest in digital asset (DA) related businesses under a ceiling of 3% of the capital. to allow for gradual expansion and limiting new risks that may affect the confidence of commercial banks and to the commercial bank group Consider investing or allocating resources carefully. When there are international standards of governance or there are sufficiently clear risk management guidelines can adjust or cancel the specified investment ceiling in general as well as investment ceilings in FinTech businesses
However, in the case of a digital asset business that still has risks or does not have a regulatory body, such as doing activities in Metaverse or DeFi, etc., can operate in a limited sandbox framework first. to consider the interests of the country risk taking care and the impact on the system as a whole before providing a wider range of services
In this regard, Ms. Rung mentioned the caseSiam Commercial Bank (SCB) announced the acquisition of shares in Bitkub Online Company Limited (Bitkub), Thailand’s digital asset exchange service provider, in the proportion of 51%, totaling 17 billion baht. But it has to be considered whether the money that SCB invests in Bitkub exceeds 3% of the capital, and if it exceeds 3%, the excess of 3% must be deducted from the capital.
“In the case of Siam Commercial Bank (SCB), understand that he will restructure the business as a holding company, in which case the holding company will have a 3% ceiling, but if the investment exceeds 3%, the money The excess of 3% must be deducted from the capital, which is possible, but a little expensive and must be looked at whether the money invested What is the book value? How much is Goodwill? The part that we will take into account the 3% ceiling is the value that is not related to Goodwill,” said Rung.
Ms. Rung stated that the Bank of Thailand still does not allow commercial bank Directly operate digital asset business to prevent new risks that may occur but subsidiary companies in the business group of commercial banks Able to conduct business related to digital assets and must be a business group that is regulated by a government agency, such as a digital asset business that the SEC has licensed, such as a digital token offering system provider (ICO Portal) and a digital asset trading center (Digital Asset Exchange), etc., including before entering the business. will have to come and discuss with the Bank of Thailand
Mrs. Rung further said that the Bank of Thailand has also upgraded the business supervision guidelines of commercial banks that deal with digital assets. by monitoring according to the level of risk (risk-proportionality) is very risk-directed. Low risk – flexible To support the restructuring and expansion into the digital business of the commercial bank group to prevent the impact on depositors and the financial system as well as having appropriate customer protection, consisting of
1. Governance In the event that the parent company not commercial bank but looks like a holding company, director of the parent company involved in the digital asset business with directors of commercial banks Must not be the same set. The list of directors can not be duplicated by less than half, that is, it must be a minority vote. and forbid having a duplicate chairman To prevent conflicts of interest within the group (conflict of interests), including a separate audit committee of the parent company. and subsidiary companies not to be the same set, etc.
In the case of commercial banks is the parent company and there are companies in the commercial bank group involved in the digital asset business The Bank of Thailand will allow the directors of commercial banks to relax. and directors of the subsidiary companies There can be no more than three out of four directors, etc.
2. There is sufficient capital to cover the risks of commercial banking business. and commercial banks The capital must reflect business risks and new risks. For example, if holding DA coins, there must be more capital maintenance. to reflect the risk of assets
3. There must be a separate work system from each other, such as the work system of a commercial bank. It will not be linked to or close to the work system of companies that do business related to digital assets. and prohibits any communication that misleads customers that commercial banks are responsible for or support digital transactions, etc.
4. have customer protection This is because new, highly volatile financial products such as digital assets may not be suitable for everyone. commercial banking group Therefore, it must ensure that the offering or product introduction is suitable for customers with different financial knowledge and risk tolerance. as well as should create knowledge and understanding for customers and supervise the use of customer data (data governance)
“What the Bank of Thailand will not allow commercial banks to do is not be able to offer to sell or to arouse the interest of a wide range of customers. We therefore do not allow commercial banks or group companies to advertise, recommend, solicit or offer to sell digital asset-related products to vulnerable groups, such as those who do not understand. or groups that are not ready to support volatility But it will allow the introduction of digital assets to those who are ready, including Ultra HNW clients & Professional investor,” said Ms. Rung.
Ms. Rung said that in the next step The Bank of Thailand will bring the draft regulations for supervision of commercial banks (BOT) that do business related to digital assets to receive opinions from related parties. And it is expected that such rules will be announced in the middle of this year.
“The Bank of Thailand believes that the adjustment of such criteria This will enable businesses in the financial sector to adapt to the changing of technology. able to sustainably grow the business The financial system benefits from competition. resulting in the development of efficient services Increase people’s access to financial services. and make digital asset business In the country, there are acceptable service standards. under good risk management Consumers are properly protected. which is consistent with the expected results. including the results of the hearing on the Financial Landscape policy,” said