Local banks are focusing on nudging their customers to digital platforms to grow services there, instead of applying for the central bank's upcoming virtual bank licence.
According to the Bank of Thailand's guidelines for the new business licence, virtual banks can raise deposits from customers.
Virtual banks will be required to have the same high level of responsibility in taking care of depositors as is currently provided by commercial banks, said Kasikornbank (KBank) chief executive Kattiya Indaravijaya.
Ms Kattiya said KBank will wait for official regulations on virtual banks to be issued by the central bank before considering whether to apply for the new licences.
If additional privileges are offered for virtual bank licences beyond digital banking services, KBank may decide to apply, she said.
KBank, the country's second-largest lender by total assets, is the industry leader for digital banking service though its K-Plus mobile app.
The bank aims to increase K-Plus users to 24 million, up from 21 million, by year-end.
According to Ms Kattiya, the bank has no plans for Kasikorn Line (K-Line), a joint venture between KBank and Line Corporation, to apply for a virtual bank licence because it does not fit its business model of digital financial services such as personal loan and nanofinance business on the Line BK platform.
Line BK has a wider customer base than traditional banking services and covers underserved clients.
The company has been growing the business positively and controlling asset quality, she said.
"Given higher flexibility in operations, Line BK has posted positive growth. We don't think a virtual bank licence would fit Line BK," said Ms Kattiya.
Line BK ranks as the industry's No.1 digital loan service provider with 5.3 million users. It aims to acquire another 1 million users by the end of 2023.
The company's target is to grow its new loans by 5 billion baht this year.
She said the two shareholders are ready to provide funding to the joint venture, with the bank expecting K-Line can raise funds on its own in the future.
Chartsiri Sophonpanich, president of Bangkok Bank, said the bank is studying the virtual bank guidelines and has not made a decision on licence application.
Chompoonoot Pathomporn, chief executive of Land and Houses (LH) Bank, said the bank is focused on developing mobile banking apps and moving existing customers onto digital platforms under LH Financial Group.
CTBC Bank, the Taiwanese major shareholder in LH Bank, offers digital banking services under a virtual bank licence in Taiwan, mainly as an option for offering a full range of financial services to customers, rather than focusing on significant business growth.
The Thai virtual bank licence is targeted at enabling business operators to reach underserved customers, thereby improving financial inclusion in the Thai market. In contrast, this market segment does not exist in Taiwan, Ms Chompoonoot said.
