The cabinet has approved the liberalisation of financial services within Asean, particularly cross-border payment and remittance services.
According to government deputy spokeswoman Lalida Persvivatana, the cabinet approved on Tuesday ratifying the protocol to implement the ninth package of commitments on financial services liberalisation under the Asean Framework Agreement on Services.
The protocol is submitted to parliament for approval before it becomes binding in Thailand.
The protocol aims to expand cooperation in trade in services among Asean member states by reducing or eliminating restrictions that impede this trade, supporting deeper regional economic integration, particularly in banking and financial services.
For Thailand, the schedule of commitments was updated in the banking sector, particularly for payment and remittance services.
For cross-border money transfers, foreign ownership is capped under the protocol at 49%, while current Thai law allows foreign ownership of up to 75%. Therefore, the protocol does not require Thailand to undertake any further liberalisation beyond what is already permitted under domestic law, and no amendments are needed.
Ms Lalida said Thailand’s participation in the protocol does not require it to lower its level of financial sector regulation.
The Asean framework will be used to create greater opportunities for Thai businesses, particularly financial service providers, to expand trade and investment into other Asean states more easily, under clear rules and common standards, she said.
The protocol was signed by Thailand on Dec 20, 2022. On April 9 this year, all 10 Asean states completed the signing process. Each nation must now complete its respective domestic procedures to ratify or accept the protocol before the rights and obligations under it become binding.
For Thailand, once parliament approves the protocol, the Foreign Affairs Ministry prepares the instrument of ratification and deposits it with the Asean Secretariat, expressing Thailand’s consent to be bound by the protocol.
The agreement aligns with the Organisation for Economic Co-operation and Development’s (OECD) approach to reducing restrictions for providing financial services across borders and promoting market access for foreign service providers, said Ms Lalida, supporting Thailand’s effort to become an OECD member.
“This process will create greater opportunities for Thailand’s financial sector to gain access to Asean markets, while maintaining the level of regulatory oversight and conditions under Thai domestic law,” she said.
“The protocol does not constitute liberalisation beyond what Thailand currently permits.”