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Registration will be classified based on the business model each startup is involved in

According to a recent report by Bangkok Post, fintech startups in Thailand will be required to register with the Bank of Thailand as an initial approach towards establishing a regulatory framework.

Though no specific timeline or mechanism are mentioned, central bank governor Veerathai Santiphrabob stated that the registration will be classified based on the business model that each startup is involving in, such as payment systems and e-wallet business.

“We have to have a proper regulatory framework that will stimulate and facilitate innovation, but we have to make sure that we have the authority to come in and step up the regulations when we see risks emerging,” he stated.

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As for peer-to-peer (P2P) lending, Santiphrabob stated that a team from the central bank has been revising comments and examining P2P lending experiences in other countries following the recently ended public hearing on the new subsector.

“We hope to be able to issue such guidelines if a small fintech company comes to register and this will be on our radar screen, but if such a company gets bigger and bigger, we will have the authority to step up our regulatory power, particularly if the business involves many people,” he said.

It is also reported that some 14 startups — all of them in the P2P lending subsector — had held talks with the central bank.

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In past year, Thailand is reported to have been amending several regulations in order to keep up with the latest developments in the fintech sector.

In 2015, the central bank proposed a new law entitled the Payment System Act that according to Santiprabhob has received cabinet endorsements. He stated that the law will give the Bank of Thailand full authority to “supervise payment system providers to help ensure [financial] stability and security.”

Related to P2P lendings, Santiprabhob said that an amendment was being made to the Credit Bureau Act in order to integrate P2P lending startups to become members of the National Credit Bureau to enable verification of credit history.

Meanwhile, Bank of Thailand’s assistant governor of the supervision group Ronadol Numnonda stated that the initial regulatory guidelines for P2P fintech startups addressed capital, loan amounts and limitations on qualified parties investing in start-ups. The regulation is expected to be completed this year.

He also stated that the central bank aims to use a “sandbox” method to supervise fintech startups.

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Image Credit: Paul Dufour on Unsplash

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