Balancing stability and efficiency

It is correctly understood that the application process for new foreign-bank subsidiaries is a two-step process: first concerning business decisions by applicants and second involving the review and approval process by the authorities. The first six-month period aims to provide candidates with sufficient time to make decisions regarding setting up a local presence, which requires substantial investments and, therefore, thorough cost–benefit analysis. Permission from the candidates’ boards of directors and home regulators must be sought, and supporting documents must also be prepared during this period. Prior experience has shown that this can be quite a lengthy process. Furthermore, the process allows the authorities to review all the applications in order to select the best candidates. 

The other six-month period is the maximum timeframe allowing the authorities to proceed with the review of each individual applicant and approval process. Authorities include the Bank of Thailand as a host regulator and the Ministry of Finance, responsible for granting a licence, each accorded three months to render a decision. The period of one year in total affords reasonable time for both applicants and authorities to make thorough decisions to ensure not only competitiveness and efficiency but also the stability of the financial system.

Bank of Thailand

Bangkok