Thailand’s plan to implement a super app for its 10,000-baht digital wallet scheme has raised concerns over the potential risk it poses to the Bank for Agriculture and Agricultural Cooperatives (BAAC). Deputy Finance Minister Julapun Amornvivat revealed that the app would be integrated with existing mobile banking apps, offering users a convenient and accessible solution for making purchases.
The super app, developed in collaboration with the Ministry of Digital Economy and Society (DES) and the Digital Government Development Agency (DGA), aims to prioritize open-loop solutions. This will enable wallet users to make transactions at various stores, ensuring wider accessibility with user-friendly instructions.
One significant advantage of the digital wallet scheme is that eligible individuals do not have to open a bank account with state-owned financial institutions to receive their funds. Instead, the “Tang Rat” app, created by the Interior Ministry and the DGA, already serves as a platform for individuals receiving disability or pension payments to track their remittances.
Despite the promising prospects of the 500-billion-baht digital wallet initiative, concerns have been raised surrounding the BAAC’s liquidity risk. Saknarong Siriporn Na Ratchasima, the deputy secretary of the Thai Sang Thai Party and a former BAAC specialist, warns that the bank’s financial stability could be compromised by funding such a large loan. This risk is exacerbated by the bank’s existing debt, including losses incurred by the rice-pledging program under the previous government.
While the BAAC has claimed to have adequate liquidity to sustain its operations, experts argue that issuing a massive digital wallet loan could worsen its financial situation. This could impede the bank’s ability to support farmers, which is one of its primary objectives.
As Thailand moves forward with its ambitious digital wallet scheme, it will be crucial to address the potential liquidity risk faced by the BAAC. Finding a solution to ensure the financial stability of the bank while implementing this initiative is essential to supporting the nation’s farmers and achieving the policy’s intended goals.
Thailand’s plan to implement a super app for its 10,000-baht digital wallet scheme is raising concerns about the potential risk it poses to the Bank for Agriculture and Agricultural Cooperatives (BAAC). The BAAC, as a state-owned financial institution, plays a crucial role in providing financial support to farmers in Thailand. However, the implementation of the digital wallet scheme could potentially strain the bank’s liquidity.
The super app, developed in collaboration with the Ministry of Digital Economy and Society and the Digital Government Development Agency, aims to offer a convenient and accessible solution for making purchases. By integrating with existing mobile banking apps, users will be able to make transactions at various stores, ensuring wider accessibility with user-friendly instructions. This open-loop solution will provide flexibility and convenience to users.
One of the advantages of the digital wallet scheme is that eligible individuals do not need to open a bank account with state-owned financial institutions to receive their funds. Instead, they can use the “Tang Rat” app, created by the Interior Ministry and the Digital Government Development Agency, which already serves as a platform for tracking remittances for individuals receiving disability or pension payments.
However, concerns have been raised about the BAAC’s liquidity risk in funding such a large loan. Saknarong Siriporn Na Ratchasima, a former BAAC specialist, warns that the financial stability of the bank could be compromised by issuing such a massive loan. This risk is compounded by the bank’s existing debt, including losses incurred by the rice-pledging program under the previous government.
While the BAAC claims to have adequate liquidity to sustain its operations, experts argue that issuing a substantial digital wallet loan could worsen its financial situation. This could potentially hinder the bank’s ability to support farmers, which is one of its primary objectives.
As Thailand moves forward with its ambitious digital wallet scheme, it will be crucial to address the potential liquidity risk faced by the BAAC. Finding a solution to ensure the bank’s financial stability while implementing this initiative is essential in supporting the nation’s farmers and achieving the policy’s intended goals.
For more information on Thailand’s digital economy and the challenges it faces, you can visit Digital Today.
The source of the article is from the blog japan-pc.jp