No forced bank mergers, finance chief says, dousing market rumours

Apisak said the tax measures, which were approved by the Cabinet on Tuesday, are merely tools to enable a more convenient merger process in order to strengthen the commercial banks.
He dismissed speculation that the measures were aimed at forcing state-backed banks to merge. Rather, they are there to facilitate and support any merger deals that may arise. Shares of Krungthai Bank and TMB Bank have come under the spotlight after the Cabinet announcement.
“The measures relate to taxable transactions as a result of mergers. One part will see tax waived to facilitate mergers. Another part involves the deduction of expenses incurred from costs associated with a merger deal,” he said.
 “Thai banks are now strong but cannot compete with banks in the region in terms of size.
“When banks are small, it's difficult for them to find business opportunities and this recently approved tax measure is introduced to encourage mergers. But whether or not a merger will occur, it depends on each bank to decide.”
Elsewhere in the financial sector, the Bank of Thailand (BOT) and the Ministry of Finance have between them issued 16 notifications to regulate the country’s payments system in an effort to help ensure operators’ compliance with a new law.
The new law also covers foreign operators. Singapore-based e-commerce operator Lazada, through its Lazada Wallet subsidiary, has been granted a licence for payment services. 
In addition to the 16 notifications, the BOT and the ministry have reduced the minimum requirement for the registered capital of service-providers in the fast-growing electronic money (e-money) sphere, from Bt200 million to Bt100 million, to allow smaller operators to compete for business.
Siritida Panomwon Na Ayudhya, assistant governor for payment systems policy and financial technology group at the BOT, said that with the notifications, operators seeking to provide four types of services must get permission from the central bank. This requirement reflects the potential for any problems that may arise to have a broad impact on the financial system.
The service areas that are mandated for BOT approval are: credit, debit and ATM cards; e-money; payments; and money transfers. Other services that are less widely used will not trigger the requirement for BOT permission, but the providers of these services must be registered with government agencies or have notified the central bank about them.
The 16 notifications fall under the Payment System Act, B.E. 2017 and were announced in the Government Gazette on Tuesday.
Alongside the minimum requirement of Bt100 million in registered capital for e-money service providers, the amount for service providers of general payments has been set at Bt50 million, and for providers of services for utility payments it is Bt10 million. The latter is also the mandated amount for providers of payments services via electronics means.
 “Reducing the registered capital requirement for e-money service providers is aimed at allowing new operators, particularly smaller ones, to compete. Now, about 20 operators provide e-money services,” Siritida said.

Licensing requirements 
She said that, with the announcement of the notifications, some 100 existing service providers that are licensed for this business are required to have their licences amended to incorporate the new criteria. They must act within 120 days or by August 14. Around 10 prospective operators are moving through the application process for licences, Siritida said.
Foreign operators seeking to provide payment services to Thais are required to register with the Thai authorities and submit their applications in line with the licence criteria, Siritida said.
The Payment System Act, B.E. 2560, integrates three laws related to the payment system into one in order to facilitate operators, lessen the legal burden and make doing business easier, while encouraging the application of technology and innovations to further boost the development of the payment system.
“After the TrueMove H incident, the BOT had discussions with True Money on customer data care and there’s no problem,” said Siritida, referring to a reported data breach at a partner of True Move H.
“TrueMove H and True Money are not the same company. The BOT inspects True Money every year and there’s no problem.”
She said that the uptake of services under the government’s PromptPay scheme is continuing to rise.
By Monday, about 40 million users of the scheme had been registered. Of the total, some 27 million did so via their personal identification card numbers and 13 million by their mobile phone numbers.
PromptPay’s accumulated money transfers amounted to 173 million transactions worth about Bt700 billion.