BOT: Virtual Banks Must Separate Real Sector & Finance | CPALL Shareholders Reject Subsidiary

MGR Online•Economy•1d ago

Reader Briefing

The Bank of Thailand (BOT) is reinforcing its stance that virtual banks must maintain a clear separation between financial operations and the real economy, a principle highlighted by CPALL shareholders' decision not to integrate subsidiaries into the virtual bank.

•The Bank of Thailand (BOT) is scrutinizing the establishment of two virtual banks, Ascend Bank and BankX.
•Ascend Bank, under CP Group, faces hurdles as CPALL shareholders may not approve the integration of financial businesses.
•The BOT insists on a strict separation between the financial sector and the real economy for virtual banks.
•This separation is crucial to prevent the financial arm from unfairly benefiting the real sector business.
•Alternative integration methods are being considered if shareholder approval for the current structure fails.

Overview

•The Bank of Thailand (BOT) is monitoring the progress and service launch timelines for Ascend Bank and BankX, two virtual banks.
•Ascend Bank, a subsidiary of ACM Holding under CP Group, is expected to integrate three financial businesses from CP All Public Company Limited (CPALL).
•This integration hinges on the approval of CPALL shareholders, who may not consent to the proposed arrangement.
•The BOT reiterates its core principle that virtual banks must maintain a clear separation between financial operations and the real sector.
•This separation is crucial to ensure that the financial sector does not unduly favor the real sector business, preventing conflicts of interest.
•The BOT desires new players in the virtual banking space, which could be entirely new entities or existing Real Sector companies.
•The BOT emphasizes that if a Real Sector company enters the virtual banking sphere, its ability to control business operations must be clearly severed from the financial entity.
•Alternative pathways for compliance are available should the CPALL shareholders reject the current integration plan, with multiple compliant approaches having been outlined.

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Key Quotes

Chayawadee Chaiyanan

"The financial sector and the Real Sector must be separate. The BOT has this clear principle because the BOT wants new players, which could be new companies or companies already in the Real Sector. Therefore, it must be clearly written that if it's the Real Sector, it must be completely severed in terms of the ability to control business power."

ภาคการเงินและภาค Real Sector ต้องแยกกัน ธปท.มีหลักการนี้ชัดเจน เพราะ ธปท.อยากได้ผู้เล่นใหม่ๆ อาจจะเป็นบริษัทใหม่เลย หรือ บริษัทที่ทำ Real Sector แล้วเข้ามาก็ได้ ดังนั้นต้องเขียนให้ชัดเจน ว่าหากเป็น Real Sector จะต้องตัดให้ขาดในแง่ของความสามารถในการควบคุมอำนาจกิจการ ต้องไม่ปนกัน

Chayawadee Chaiyanan

"Otherwise, the financial sector can favor the Real Sector. Therefore, it must be cut. If shareholders do not agree, there are other approaches, which have already been provided, that can be compliant and adhere to the criteria."

ไม่เช่นนั้นภาคการเงินจะเอื้อ Real Sector ได้ เพราะฉะนั้นต้องตัดให้ได้ หากผู้ถือหุ้นไม่ยอมก็มีแนวทางอื่น ซึ่งให้ไปแล้วว่ามีหลายแนวทางที่จะทำให้ถูกได้ และเป็นไปตามหลักเกณฑ์

Key Entities

Organization

Bank of Thailand (BOT)(ธนาคารแห่งประเทศไทย (ธปท.))ℹ️

The central bank of Thailand, monitoring virtual bank development and setting regulatory principles.

Ascend Bank(ธนาคารแอสเซนด์ (Ascend Bank))

A virtual bank under development, part of the CP Group's initiatives.

BankX(ธนาคารเอกซ์ (BankX))

Another virtual bank in the process of establishment that the BOT is monitoring.

ACM Holding(เอซีเอ็ม โฮลดิ้ง)

The parent company that Ascend Bank is under, part of the CP Group.

CP All Public Company Limited (CPALL)(บมจ.ซีพีออลล์ [CPALL])

A company whose subsidiaries are proposed to be integrated into Ascend Bank, and whose shareholders' approval is critical.

Person

Chayawadee Chaiyanan(น.ส.ชญาวดี ชัยอนันต์)

Assistant Governor of Corporate Relations and Spokesperson for the Bank of Thailand (BOT).