THAILAND Law and Practice Contributed by: Wongsakrit Khajangson, Panupan Udomsuvannakul, Koraphot Jirachocksubsin and Pitchaya Roongroajsataporn, Chandler Mori Hamada
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
ards may be enforced. The BOT will observe the underwriting practices of commercial banks and may issue notifications to oversee lending activi - ties. This is intended to enhance underwriting standards if the existing market standards are found to be too lenient. 4.3 Sources of Funds for Fiat Currency Loans As mentioned in 4.1 Differences in the Busi - ness or Regulation of Loans Provided to Dif- ferent Entities , there are no specific online or offline regulations. Online lending is subject to the same regulations as offline lending. Thus, the source of funds, the method of raising funds and restrictions thereon will depend on the business activity. 4.4 Syndication of Fiat Currency Loans Online lending is generally for individuals in Thai - land. As such, syndication of fiat currency loans is uncommon. However, there are no restrictions on syndicating online loans. There are no specific requirements for payment processors to use existing payment rails such as credit cards or electronic payment settlement agencies. However, payment processors have to apply for a licence from the MOF as recom - mended by the BOT or have to register with the BOT in accordance with the Payment Systems Act. Payment processors who implement new tech - nology into their business operations can apply to participate in the BOT’s regulatory sandbox if 5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
The regulations for both online and offline loan business activities are generally the same. Dif - ferent regulations apply, depending on the type of loan rather than on the business operations of the operator/service provider. For example, a supervised personal loan is pro - vided to individuals, not corporations. A super - vised personal loan cannot be granted where it is more than five times the average monthly income of a borrower with an average monthly income of THB30,000 or above. PICO finance is a personal loan granted to prevent or solve infor - mal debt issues. A PICO finance loan may not exceed THB50,000 or THB100,000, depending on the type of PICO finance operator. However, in 2021, the BOT permitted licensed personal loan business providers to offer digi - tal personal loan services in Thailand with the approval of the BOT. Lenders may grant digital personal loans with a maximum credit amount of THB20,000. Effective rates of interest charged, together with the relevant fees, must not exceed 25% per annum. The BOT regulations relax cer - tain criteria for the provision of personal loans and provide some flexibility, such as using alter - native data for financial service providers to pro - vide online lending services. 4.2 Underwriting Processes There are no specific underwriting processes for online lenders prescribed by regulations in Thailand. Commercial banks may develop their own underwriting standards and compliance measures. When a loan is granted for a specific industry, certain industrial underwriting stand -
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