What would happen if a Bank goes down?

[CNXBKKMAN]

If you are worrying about the Thai Banking system there are two categories of people. Those who decided to invest their 1 million baht in the bank itself and bought shares in it and those who deposited the 1 million baht in a savings account earning 1% interest.  The depositors will always get their cash back even if the BOT has to create some funny money. Confidence in the banking system has to be maintained or the whole lot will go to <deleted>. The share holders will be wiped out or have very little of their original equity left. 

[mike787]

Life will go on...nothing much will go wrong, we humans will preserver and freelance...barter/trade for goods and favors...don't sweat it..

[saengd]

7 minutes ago, WhereIsMyRyeBread said:

Yea but there seems to be contingencies.

 

'From August 11, 2019 Thai Baht Deposits are protected under the Deposit Protection Agency Act up to a maximum of 5 million baht per one depositor per financial institution until August 10, 2020.

 'except for Non-Resident Baht Accounts (NRBA).  '   Exactly what is an NRBA account?  (I"m asking).

 

If the intention is to cover all accounts across the board that 'except' contingency wouldn't have been stated.

It may mean only account holders with a workpermit is covered and other accounts are considered NRBA.

What about people whom may have opened a bank account and changed his/her type of visa/workpermit/no workpermit a number of times. 
Would anyone be surprised if the bank announced you need to present a valid workpermit to make a claim while at the same time people losing their jobs due to the crash and will lose the workpermits. It often comes down to who has a workpermit and who doesnt like we're seeing now with the expats allowed back in to Thailand again.

If that's the case all expat retirees and non immi O visa without a current workpermit could not make a claim for compensation with the deposits they've made as unsecure lenders to the bank aka 'a savings account' and your claim will not be prioritized.

Also foreign currency accounts e.g in USD with BKK Bank is not protected as I read.

 

It's rather time sensitive information, in my opinion its uncertain.

 

Non-Resident Bank Accounts, NRBA's are designed for people who are not Thai resident and those people who don't live in Thailand fulltime. The difference between an NRBA and a RBA is that NRBA's cannot accept deposits in THB and funds in the account can be transferred back overseas at will without any supporting documentation. In addition, NRBA holders do not pay tax tax on any foreign income.

 

Unless you specifically ask for it your bank account will be opened as a resident bank account, NRBA's are not common among expats here.

 

Foreign Currency Accounts and Investment accounts are not covered by the DPA, neither are NRBA's, all expat RBA's are covered in the same way that Thai nationals are covered. 

 

Evidence of a work permit is no required for DPA protection, why would it be.

 

[WhereIsMyRyeBread]

6 minutes ago, CNXBKKMAN said:

The depositors will always get their cash back even if the BOT has to create some funny money.

That's a broad and reassuring statement but you need to think about is some more. Look at Greece debt crisis in 2015.

Capital controls didn’t allow withdrawals of more than €60 a day. Endless queues formed in front of bank branches, with customers waiting for over three hours to withdraw their money.

While you withdraw that small amount daily (if you can get it), the currency is devalued and that's how the money is lost.

[saengd]

1 minute ago, WhereIsMyRyeBread said:

That's a broad and reassuring statement but you need to think about is some more. Look at Greece debt crisis in 2015.

Capital controls didn’t allow withdrawals of more than €60 a day. Endless queues formed in front of bank branches, with customers waiting for over three hours to withdraw their money.

While you withdraw that small amount daily (if you can get it), the currency is devalued and that's how the money is lost.

THB is not a fully convertible currency, it cannot be exported or held overseas. There is therefore zero reason why any bank in Thailand would impose capital controls here because the money can't go any where.

[Matzzon]

22 minutes ago, donnacha said:

Sadly, saying something multiple times does nothing to convert it from being wrong to being right. It's still pretty much just as dumb the third time.

I'm sorry, but, have you ever actually dealt with Thai bureaucracy?
Do you understand that your compassionate friends in Thai immigration will be charging the foreigners trapped in Thailand by canceled flights 20,000 baht on their eventual way out?

No. In a discussion about the possible implications of an unprecedented situation, I laid out what I think could, quite possibly, happen. Most people who read this forum actually want to be aware of such possibilities. Others, like you, react emotionally to things you don't want to hear. I have met all you since I started posting back in January about the Coronavirus being a possible problem. Not one of you have had the self-awareness or humility to admit you were wrong about that one.

As I said, I am here for the people who want to dispassionately examine the problems we all face. I am suggesting that you should put me on your ignore list because, as you have shown in multiple threads, you do not want to hear bad news.

Personally, I do not block people or use ignore lists because I think they are for idiotic snowflakes. Obviously, that is just my approach to life, but it does not preclude you using your Ignore list, you are an excellent match. Nothing I am going to write over the coming weeks about the current situation is going to be designed to help you avoid reality. So, seriously, either pop me onto your Ignore list or, at least, stop responding to my posts, because we are here for entirely different reasons.
 

So, informing about the conditions and what would happen if a bank goes down in a thread about just that is dumb? Go figure!

Yes, I have dealt with thai bureaucracy at many different times dealing with all from visas to companies as well as ownership of land, house and condos. Nobody at immigration is going to charge anybody that do not overstay in Thailand any 20k baht.

When have I made a serous post about the Coronavirus not being a problem? We joke a lot here to, and use a lot of sarcasm. Probably a thing you´ve missed.

 

You do know that people have different opinions, right? That´s why we discuss in an open forum. In other words it´s not only your opinion that is right. Better learn that people discuss about things even if they do not agree with you.

And here you are in plain text calling me "an idiotic snowflake", which is against the rules. Like I said, if you wish to avoid reading my posts on this open forum, it´s up to you to use the ignore list. I have no problems. They are all owned by you. Cheers! ???? 

[Matzzon]

35 minutes ago, Lacessit said:

I'm reminded of the aphorism " It's difficult to soar like an eagle when you work with turkeys".

Sounds like you have personal experience. On what side?

[donnacha]

2 minutes ago, WhereIsMyRyeBread said:

That's a broad and reassuring statement but you need to think about is some more. Look at Greece debt crisis in 2015.

Capital controls didn’t allow withdrawals of more than €60 a day. Endless queues formed in front of bank branches, with customers waiting for over three hours to withdraw their money.

While you withdraw that small amount daily (if you can get it), the currency is devalued and that's how the money is lost.

Look at the "bail in" of 2013 in Cyprus. They corrected a deficient by reaching right into bank accounts and removing 20% of the money. They simply confiscated it.

It was structured in such a way to disproportionately affect foreign account holders rather than Cypriot voters. Expats in Thailand should be aware of that such a thing is possible, albeit unlikely.

 

[WhereIsMyRyeBread]

2 minutes ago, saengd said:

Evidence of a work permit is no required for DPA protection, why would it be.

Thanks for the info. Just to answer the 'why would it be' .
As you may have noted workpermits are in some contexts being used to differ between who is a resident and who is not in many contexts.

For example, if you would like to enter Thailand now you need to have a workpermit not just a non-immi O marriage visa, you get reduced entry fee for some public venues if you have a work permit as you're considered a local but if you only got a non immi O visa you pay the farang fee. e.g national parks and stuff..hence the idea.  But that's a diff topic..

 

[Muzzique]

Don't know what we're all worried about.

 

Given the Mortality rate of CV19 and the Thai healthcare system, most of us older Ferangs will be pegging off in a few weeks time leaving plenty of cash behind us. This should be more than enough to keep the bank afloat.

 

You need to look at the positives here ????

[saengd]

1 minute ago, WhereIsMyRyeBread said:

Thanks for the info. Just to answer the 'why would it be' .
As you may have noted workpermits are in some contexts being used to differ between who is a resident and who is not in many contexts.

For example, if you would like to enter Thailand now you need to have a workpermit not just a non-immi O marriage visa, you get reduced entry fee for some public venues if you have a work permit as you're considered a local but if you only got a non immi O visa you pay the farang fee. e.g national parks and stuff..hence the idea.  But that's a diff topic..

 

I've been here for about twenty years on different visa's at different times, predominantly an O-A and an O but I did hold a work permit for a while, way back when. I have never noticed any difference in the way I am treated as a result of holding one visa type versus another, except that work permit holders can transfer funds outside Thailand more easily, at least that used to be the case, now I think it's a level playing field. The discount for Thai attractions largely came in as a blanket rule for all foreigners although at one time I could get discounts for holding a Thai driving license, visa type however was never an factor.

[Assurancetourix]

4 hours ago, saengd said:

Second, Thai banks are rated quite highly by the rating agencies such as Moodys and Fitch who have increased their credit ratings a couple of times fairly recently.

The TMB don't seem to get on tracks ...
2 bankruptcies in less than 50 years

 

donnacha wrote :

 

" Look at the "bail in" of 2013 in Cyprus. They corrected a deficient by reaching right into bank accounts and removing 20% of the money. They simply confiscated it.

It was structured in such a way to disproportionately affect foreign account holders rather than Cypriot voters. Expats in Thailand should be aware of that such a thing is possible, albeit unlikely. "

 

I would add that Brussels has forbidden banks to punish sums below 100,000 euros on current accounts ....
Except that in the event of a serious financial crisis, and we're in the middle of it, and well this ban will be lifted and the banks will draw up to the last penny on the accounts they hold.
You will have your eyes left to cry.

 

All banksters have the same idea behind the head; whether they are German or Thai does not change anything;

 

 

Edited March 26, 2020 by Assurancetourix

[stevenl]

4 hours ago, donnacha said:

Probably mostly wish-fulfillment, if his bank does collapse he's in deep trouble:
 

I'm guessing that 76% of his "liquid wealth" is the 400K he needs to keep renewing his marriage visa. His "assets" outside Thailand is the caravan back home he hasn't managed to sell yet.


 

Difference is his opinions are based on facts, yours on doom thinking without any factual basis.

[david555]

16 minutes ago, Muzzique said:

Don't know what we're all worried about.

 

Given the Mortality rate of CV19 and the Thai healthcare system, most of us older Ferangs will be pegging off in a few weeks time leaving plenty of cash behind us. This should be more than enough to keep the bank afloat.

 

You need to look at the positives here ????

To limit that "Mortality rate of CV19 donation " you could transfer half from the 800K for example 6.5 months out to home country bank (or keep under pillow...) in the allowed period from the Ret.Ext. and back transfer/deposit in for the new application 2 months seasoning (3?)  limiting the risk so...????

[saengd]

12 minutes ago, Assurancetourix said:

The TMB don't seem to get on tracks ...
2 bankruptcies in less than 50 years

I haven't read about their past but today they have merged with Thanachart Bank in Thailand's biggest ever bank merger, the joint company is owned by ING (Netherlands), Scotibank (Canada)and the Finance Ministry plus others, holdings are 21%, 18% and 6% respectively, seems like a pretty decent pedigree to me. 

[baansgr]

1 hour ago, pdtokyo said:

I'm in Oz ...

one of the best-padded air-bagged seat-belted ABS-equipped and cashed-up banking systems in the world

regulations, guidelines, trading parameters, conservative lending practices and corporate reporting from wall to wall

just finished a Banking Royal Commission that (in public at least) kicked <deleted> out of the big bank management ... one hospitalised, several resignations

all major banks floating on stock exchange and subject to all the scrutiny that entails

place run by lucky-to-be-in-office government falling over itself to look after 'hard-working Australians'

 

You're (mostly i guess) in Thailand

you fill in the blanks

 

Q: If there are significant bank failures and they are not bailed out by government, where would you rather be?

 

My answer

Thailand, in my partner's home village surrounded by rice paddies, fruit trees, veggies, the occasional fish, a passable water supply and a functional family.

 

Why? because if banks fail in Oz (or anywhere) and they are not bailed, then all bets are off, money becomes worthless, gold won't hack it either. Food and security go straight to the top of the list.

 

Your answer

 

.......................................................................................

(blue or black pen and provide two photocopies)

 

 

... and in case any waggish poster wants to point out that Oz produces way more food than it consumes, save yourself the trouble, i know, i live on a property surrounded by cattle and corn ... 99.9% of the Oz population (including me) would not have a clue how to convert cow->T-bone or even recognise a corn stalk, witness ... the Great Toilet Paper Insurrection of 2020 ... we cannot even work out an alternative method of cleaning our bums.

Good to see someone is taking the situation seriously...but by this stage a vaccine/cure SHOULD have been found....just hope my spring onions, basil and mint last a long time

[Lacessit]

1 hour ago, Matzzon said:

Sounds like you have personal experience. On what side?

I put that in because I was reminded of children in the sandpit squabbling over whose turn it was with the bucket.

[Lacessit]

1 hour ago, saengd said:

THB is not a fully convertible currency, it cannot be exported or held overseas. There is therefore zero reason why any bank in Thailand would impose capital controls here because the money can't go any where.

That is news to me, because I regularly take Thai baht out of Thailand so I don't have to use an airport ATM or do currency exchange when I come back.

I could exchange my Thai baht for AUD when I land in Melbourne with Travelex, if I felt like being bent over.

Edited March 26, 2020 by Lacessit

[TheFishman1]

I think my money is safe in the thia banks here

[saengd]

1 hour ago, Lacessit said:

That is news to me, because I regularly take Thai baht out of Thailand so I don't have to use an airport ATM or do currency exchange when I come back.

I could exchange my Thai baht for AUD when I land in Melbourne with Travelex, if I felt like being bent over.

I thought it might be but it's really not a secret.

 

I've probably posted the following link over one hundred times yet there are still people who either don't know or don't believe:

https://www.bot.or.th/English/FinancialMarkets/ForeignExchangeRegulations/FXRegulation/Pages/default.aspx

 

THB can be held by overseas banks in only very limited amounts, either for themselves or on behalf of customers, if they exceed those limits (which are quite low) BOT will not allow that bank to transact again in THB.

 

Foreigners and citizens can transfer funds overseas but not in THB, banks ALWAYS convert the funds to the currency of the destination country first. It is possible to hand carry THB out of the currency but this is subject to low limits, 50,000 Baht for most of us to most destinations, exceptions are to Vietnam and some Chinese provinces where it's 2 mill. Baht.

 

Even Thai citizens must follow recently relaxed guidelines regarding the export of currency.

 

This is one of the major reasons why THB remains strong and why hedge funds can no longer take a position against the currency (as they did in 1997).

 

 

[morrobay]

6 hours ago, saengd said:

Have a read, take your pick.

 

 

I don't need to go through all that mumbo-jumbo. The term 2nd  world originated from the countries in column 2 in the U.S. Customs tariff schedule. Currently only Cuba and N. Korea . 

[saengd]

1 minute ago, morrobay said:

I don't need to go through all that mumbo-jumbo. The term 2nd  world originated from the countries in column 2 in the U.S. Customs tariff schedule. Currently only Cuba and N. Korea . 

Feel free to keep using the term third world country if you wish, if that and wearing kipper ties and flared trousers makes you happy.

[morrobay]

2 minutes ago, saengd said:

Feel free to keep using the term third world country if you wish, if that and wearing kipper ties and flared trousers makes you happy.

You might be able to get by as second rate economist but forget all about a comedian 

[Just Weird]

7 hours ago, Pravda said:

Even in good times when there were rallies back in 2014 against Taksin there was a talk about certain bank going down. My ex wife pulled 3 million and so did many other customers. 

So which bank "went down", then?

[saengd]

10 minutes ago, morrobay said:

You might be able to get by as second rate economist but forget all about a comedian 

Funny, so many posters with so much angst because they didn't get it and thought that they had, I suppose it's a bit like telling someone their kid is ugly, not well received. What can be said, you're never too old to join up the dots. The truly odd part is that then having conceded the debate about the Baht and the economy they then feel the need to insult and make it personal, what's all that about I wonder!

Edited March 26, 2020 by saengd

[Just Weird]

8 hours ago, ChipButty said:

I can help thinking like lots of guys on here all have money in some Thai banks

In the current situation when lots of us Farangs have at least 800k in a bank and the possibility of the bank going bust

Why would you even think about that, do you think that foreigners with their B800k in the banks are the ones that keep the banks afloat and what has prompted you to suggest that a bank may go down?  Jesus...

Edited March 26, 2020 by Just Weird

[iaminwa]

8 hours ago, saengd said:

I think you are thinking too much for a number of reasons.

 

Firstly, deposits up to 5 mill. Baht are insured by the DPA until August, thereafter it's 1 mill. Baht.

 

Second, Thai banks are rated quite highly by the rating agencies such as Moodys and Fitch who have increased their credit ratings a couple of times fairly recently.

 

Third, Thai banks Tier 2 Capital Adequacy Ratio's at Thai banks are much higher than is required by law, they average around 9%.  That means bank balance sheets can withstand much more stress than many of their Western counterparts.

 

Finally, a lot of the actions that the likes of BOT take in the financial and economics arena today have their basis in the economic crash of 1997. BOT and government is so determined not to repeat any part of that process that they tend to veer heavily towards the side of safety and caution rather than anything else and at times that can be a problem for the economy, case in point the IMF urging the government to operate a higher deficit budget which they believed was far too low! 

 

If it helps any, at various times over the past ten years I have held up to 90% of my liquid wealth in Thai. banks in Thailand, I'm currently holding 76% here, that is over 60% of my total assets.

 

 

So explain this to me.

 

A Farang guy I know has been divorced now from his Thai wife for 4 years - judge determined that their newly built house in a gated community in Bangkok with a mortgage be sold and any profits from said sale to be split between them.

 

House goes on the market for sale - Farang stays in house, ex Thai wife goes back to the village.

 

Farang stopped paying the mortgage 3 years ago, and only pays the utilities.

 

When I asked him why has the bank not foreclosed on it - he said they don't foreclose in Thailand for years, as they have so many properties already.

 

What a mess.

 

Edited March 26, 2020 by iaminwa

[saengd]

2 minutes ago, iaminwa said:

So explain this to me.

 

A Farang guy I know has been divorced now from his Thai wife for 4 years - judge determined that their newly built house in a gated community in Bangkok with a mortgage be sold and any profits from said sale to be split between them.

 

House goes on the market for sale - Farang stays in house, ex Thai wife goes back to the village.

 

Farang stopped paying the mortgage 3 years ago, and only pays the utilities.

 

When I asked him why has the bank not foreclosed on it - he said they don't that in Thailand for years, as they have so many properties already.

 

What a mess.

 

I'm sure Thai banks have other practices that you and I might see as different from what we're used to in the West but hey, that's the way it is, that's what they do. And as long as the numbers stay right who cares. I guess I can imagine that a bank might think that having someone living in the property taking some care of it is better than leaving it empty and potentially being trashed and the garden overgrown etc etc.

[Benmart]

What if the Moon collides with Earth? I suppose since it is in the future and hasn't occurred, I will find out when and if it happens. In live in the present and leave fortune telling to those with such a gift.

[marquis22]

"What would happen if a Bank goes down?"

My wife would be out of a job and have to stay home!!!