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Kasikornbank will soon be Thailand’s second bank to be locally incorporated in China, with hopes of cashing in further on the growing trade between the two countries.
Thailand’s fourth largest bank by assets is currently going through the final procedures with the Chinese authorities, with official approval to be completed by mid-2017, Chairman Banthoon Lamsam told reporters on Thursday. Incorporation in China will enable Kasikornbank to operate on the same conditions as a local bank, including offering full-scale renminbi services to local clients. It would become the second Thai bank to incorporate in the country after Bangkok Bank.
“China is a super power country, especially at a time when so much change is going on in the global political landscape,” Banthoon said. He added: “The trading power of the West will be more difficult to rely on. We must lead on the East in which China stands as an important country.”
Neither the economic slowdown nor the massive shadow banking industry in the country seems to bother Banthoon. “China does have its own problems but they have the system to adjust and control so the situation will remain manageable and can go on,” he said.
Additionally, Kasikornbank on Thursday signed an agreement with Chinese fintech firm International Business Settlement to develop a baht-yuan cross-currency settlement system using blockchain technology.
It will be based on an IBS platform which the Chinese company claims will be a cheaper, quicker and safer alternative to the dominant SWIFT settlement system. IBS Chairman Luo Feng said that his company is working with central banks in Europe and other regions in the world to develop the new settlement and clearing network.
“IBS has the technology and network to facilitate international settlement that is not based just on the U.S. dollar, at a time when the yuan’s international presence is increasing,” Banthoon said.
The system IBS is developing will enable direct settlement of transfers between baht and yuan, without the need to use U.S. dollar conversions at any point in the procedure.