BoT advises consumers to check bank position to prevent deposit losses

BANGKOK: -- Consumers should always check the financial status of banks where they deposit money to prevent possible risks when the Deposit Insurance Institute Act takes effect on August 11, according to a senior Bank of Thailand (BoT) official.

Nat Tapasanant, director of the BoT Fund Management Office, said he did not think depositors would withdraw money from small banks to deposit with large banks when the Act goes into effect because the institute guarantees the principal of depositors in an equal amount at every bank.

Under the Act, the full amount of deposits shall be protected in the first year of enforcement, Bt100 million in the second year, Bt50 million in the third year, Bt10 million fourth year, and only Bt1 million from the fifth year onward.

Mr. Nat said said there is no problem in shifting deposits in foreign countries where Deposit Insurance Institutes are established.

Should people worry about the stability of banks in which they deposit funds, he suggested, they should check their financial position regularly by monitoring stock prices and the behaviour of major depositors.

If there was something amiss regarding stock price movements or major depositors withdrew large amounts of money, small depositor should take care to check the stability of the banks.

Mr. Nat said that "deposit insurance will help protect depositors from serious damage in case any financial institution is in financial trouble.

"Depositors will get back their money within 30 days of applying for an insured amount of deposits if a financial institution collapses," he explained.

"The Act covers baht-denominated deposits with local and foreign banks, finance companies and credit foncier firms," he said.

--TNA 2008-04-11

sounds a bit worrying . Which banks in Thailand would be considered safest ? and which most at risk ?

This kind of speculation could cause a collaspe of the smaller banks!! as everyone may start to transfer to the lager ones ... similar to the northern rock panic, where everyone withdrew there savings.

I bank with Siam Commercial... hope they are safe....

I also bank with Siam commercial . This Bank together with Bangkok bank are one of

the safest bets . They are in the top three banks in Thailand , based on capital and investments .

Do not think there is much to worry about , unless the Bank of Thailand is bankrupt .

with a policy of declining protection, it seems they are encouraging depositors to spread the money around.

This kind of speculation could cause a collaspe of the smaller banks!! as everyone may start to transfer to the lager ones ... similar to the northern rock panic, where everyone withdrew there savings.

I bank with Siam Commercial... hope they are safe....

Easy... check the ratings.

http://www.fitchratings.com/corporate/sect...ntent=issr_list

As for the "nothing to worry about", well, it depends !

One fact : the state guarantee for unlimited amounts is over. In 5 years, the insurance will cover 1 million THB only.

We are talking here about "insurance"... it's related with disaster. When everything is fine, nobody worries. When the manure hits the fan, they everybody is concerned.

The solution is to take care of the issue before.

As stated in the article : better to put your money in large banks, with good ratings (eventhough, since a few months... we start to understand that ratings in the US... can be total bullshit).

Even better : use several banks, to cut the risks.

Why would anyone keep more than B 1 million in a Thai bank anyway (if one was an expatriate)? Seems pretty foolish to me.

Things would have to really be going down the tubes for Bangkok Bank, Siam Commercial, or Thai Farmers to be on the verge of collapse. Don't forget, SCB is basically owned by the monarchy (Crown Property Bureau) so I don't it would ever be allowed to fail.