Multiple groups backed by Thailand's top billionaire have been granted Digital Bank licenses.

According to Gate News bot, Bloomberg reports that the Central Bank of Thailand has stated that three groups led by Charoen Pokphand Group, Gulf Development Pcl, and SCB X Pcl have obtained new virtual banking licenses in Thailand to enhance competition in the country's banking sector.

The Bank of Thailand announced on Thursday that ACM Holding Co., a subsidiary of Charoen Pokphand Group, and Advanced Info Service Pcl, a mobile phone subsidiary of Gulf Development Company, have obtained licenses. SCB X, in a consortium with WeBank Co. Ltd. from China and KakaoBank Corp. from South Korea, has also received a virtual banking license.

Vice President Roong Mallikamas stated at the press conference: "We are very hopeful that the new license can enhance competition in the banking sector through new innovations and technologies."

Following similar initiatives in other Asian countries, the Southeast Asian nation of Singapore is opening up its banking sector to promote competition and provide more access to loans for underserved consumers. However, new virtual bank operators will face a situation in which traditional banks will face an increase in non-performing loans and weakening demand for credit against the backdrop of a weak economy.

Sarah Jane Mahmood, senior banking analyst at Bloomberg Industry Research, said the timing of the licences was "tricky and challenging". "Three years after the launch of Singapore's digital bank, it still hasn't broken even," she said. Due to the huge investment in digital platforms and marketing, it may take longer for digital banks in Thailand to become profitable. ”

Singapore issued digital banking licenses in 2020, followed closely by the Philippines and Malaysia.