Banks and Tax Authorities Set the Terms of Credit

City Bank PLC’s authorised credit teams—not its agents—assess and approve loans, while Thailand’s Revenue Department can adjust the income and expenses of related companies under statutory conditions. Across both systems, access to money and the accounting of corporate profit pass through institutions with the power to set the terms.

Who Controls Access to Credit

“ The financially invisible visible” is how City Bank Managing Director and CEO Mashrur Arefin described the promise of transaction data. For small businesses with limited formal accounts or collateral, savings patterns, remittance receipts, account transactions, business cash flows and repayment behaviour can help build a financial profile. Arefin said that information can support better-informed decisions and responsible access to finance, but it cannot replace sound credit assessment.

City Bank’s agent-banking network serves around six lakh customers through 500 outlets. It holds deposits exceeding Tk 1,800 crore and has disbursed around Tk 4,500 crore in loans. Agents facilitate account opening, deposits, withdrawals, transfers and remittances, and can connect entrepreneurs to the bank’s Small & Microfinance unit. But the bank’s authorised business and credit risk teams conduct assessments and make approvals. The division is clear: agents help applicants reach the system; the bank decides who qualifies.

Applicants generally need a national identity document, a valid trade licence where applicable, business and bank transaction records, and documents specific to the facility. The bank assesses cash flow, repayment capacity, credit history and regulatory requirements. Processing time depends on document completeness, verification needs and the complexity of the facility.

The bank offers cottage, small and micro-enterprise loans, women entrepreneur financing, remittance beneficiary loans, agribusiness and farmer financing, and eligible refinance, pre-finance and credit guarantee facilities. It also disburses short-term digital agricultural loans to smallholder farmers through agent banking, working with farmer associations, agricultural fintech firms and aggregator or supply networks. Arefin said loan amounts and repayment schedules should reflect financing purpose, business cash flow and repayment capacity.

The Rules Behind the Numbers

Arefin identified mobility, financial literacy, documentation, digital confidence and limited credit histories as barriers for women entrepreneurs. City Alo works with agent banking to train rural women entrepreneurs, build business skills and financial awareness, and support access to financing. The bank also offers tailored products and, in some cases, relaxed underwriting policies. The account describes these as bank-run services; it offers no customer testimony or account of a self-organized alternative.

Customer protections depend on bank policies and regulatory requirements. City Bank emphasizes disclosure of charges, financing costs, repayment obligations and application status, along with transaction documentation, authentication, agent monitoring and official complaint-resolution channels. Agents cannot promise unapproved loans, misrepresent terms or charge unauthorized fees. Arefin said training and suitable incentives could help agents refer borrowers and support follow-up, with performance-based commissions tied to genuine referrals, borrower selection and repayment support. Customers should not face undisclosed interest or charges to fund those commissions.

Who Bears the Risk

In a separate article, Ishan Shah, Partner – Tax and Legal at BDO in Thailand, explained that Thailand’s Section 71 bis allows the Revenue Department to adjust income and expenses between related parties when their commercial or financial arrangements differ from those independent parties would make under comparable circumstances, subject to statutory conditions. Profitable and loss-making companies alike may face adjustments.

A company’s losses alone don’t establish that its transfer pricing is inappropriate. The analysis should examine functions, risk allocation, which entity controls relevant risks, and whether it has the financial capacity to assume them. Profits elsewhere in a multinational group alone don’t establish that a Thai company’s losses violate the arm’s length principle.

Nor does a profit guarantee compliance. Shah gave the example of a Thai distributor with a 1% operating margin against a 3% to 5% benchmark range for comparable independent distributors. His example of a distributor buying products from a related party for THB 90 million and selling them for THB 100 million showed how THB 9 million in operating expenses leaves THB 1 million in operating profit. The Revenue Department can request supporting documents under Section 71 ter. Contracts, actual conduct, decision-making, risk control and comparable business conditions all matter; a benchmark applied mechanically won’t settle the question.