What difference can virtual banks make in a financial market where depositors are not happy with the low interest rates offered by commercial banks while borrowers are fretting about higher lending rates?
The net interest rate spread in Thailand is much higher compared to banks in Malaysia and Singapore.
The idea of a virtual bank
A virtual bank will operate only on the digital platform, without physical branches. This is expected to offer a cost advantage over traditional banks, as no office space would be required.
Use of digital technology would also mean lower overheads in terms of staffing. The main disadvantage is the lack of human touch that traditional banks can provide to large corporations. Virtual banking services may be suitable for consumer lending more than for corporate clients.
The Bank of Thailand (BOT) had initially planned to issue only three licenses for virtual…
