Changing business environment and technological advancements has led Bank of Thailand (BoT) to revise Basel III Pillar 2 guidelines which were issued and enforced in 2009. The regulator believes this would give financial institutions greater flexibility in terms of risk management and capital adequacy required to maintain the soundness of the financial system.
Environmental, Social and Governance (ESG) factors have increasingly become crucial to build a sustainable financial market. The revised Pillar 2 guidelines would encourage financial institutions to move towards sustainability which would further support the growth of the country’s economy in the long run.
The regulation will come into effect from 1 January 2022 onwards and the regulator would closely supervise its compliance in accordance with the riskiness and complexity of the financial institution.