New Banking Issues

[klikster]

I had asked one of my Thai buddies to check on dollar accounts at Thai banks. He drove down yesterday for our monthly lunch and had some mixed news.

The 1+% interest rate doesn't bother me so much. The 1% fee for deposits and withdrawals does .. a bit.

But what sent a cold chill down my spine was a new deposit guarantee regulation. I think I heard it correctly.

Starting this/next(?) year, banks will only guarantee 80% of the deposited balance. The future guarantee levels drop 20% each year for the next 5 years and finalize at a maximum Bt 1 m guarantee.

I really find this hard to comprehend .. and hope like hel_l I either misunderstood or my buddy is wrong. I think I remember that he said this would be on all THB accounts, not just dollar accounts.

Imagine the capital flight is this really is true.

Has anyone heard about this new regulation?

Edited May 30, 2008 by klikster

[Crushdepth]

Is that all banks or a particular bank (that I would like to avoid). I have little faith in the banking system here, never mind the attitude of the government to foreign investment or the stability of the current government itself.

Last time I checked, most banks did not guarantee internet banking either - its the customer's problem if anything goes wrong.

[klikster]

Is that all banks or a particular bank (that I would like to avoid). I have little faith in the banking system here, never mind the attitude of the government to foreign investment or the stability of the current government itself.

Last time I checked, most banks did not guarantee internet banking either - its the customer's problem if anything goes wrong.

CD, the way I understood it was it would be a countrywide thing. I guess banks could guarantee on their own reputation, but nothing beyond Bt 1 m would be guaranteed by the Thai government. My buddy was very troubled about it .. and I can dam_n sure understand why.

I used to have a degree of faith in the larger banks, but now ..

I was looking for a dollar account here .. now I'm looking at Singapore

Edited May 30, 2008 by klikster

[wasabi]

Personally I only feel comfortable having as much as I need to live a few months at a time in my Thai bank. I keep the rest in my American bank accounts. If I lose it I won't be happy but it won't break the bank so to speak.

[raybingham]

Personally I only feel comfortable having as much as I need to live a few months at a time in my Thai bank. I keep the rest in my American bank accounts. If I lose it I won't be happy but it won't break the bank so to speak.

I don't think Thailand has a Bear Stearns ? (or Northern Rock).

Other countries only guarantee a percentage of deposits and up to given limits - in the UK I think first £2k is covered then 90% of next £33k and nothing after that.

Anyone know of the last Thai bank that went bust.

[klikster]

Personally I only feel comfortable having as much as I need to live a few months at a time in my Thai bank. I keep the rest in my American bank accounts. If I lose it I won't be happy but it won't break the bank so to speak.

I don't think Thailand has a Bear Stearns ? (or Northern Rock).

Other countries only guarantee a percentage of deposits and up to given limits - in the UK I think first £2k is covered then 90% of next £33k and nothing after that.

Anyone know of the last Thai bank that went bust.

It depends on what you call "went bust". Siam City Bank and BKK Metropolitan Bank had to get rescued/taken over.

[astral]

I keep the majority of my money overseas where I know exactly what the deposit protection rules are.

[Thaifan2]

If a UK bank has a melt down you are only guaranteed about 20 ,000 sterling back ,no matter how much you have with them .Recently they did increase this amount a bit i think ? Most people would not have known this till Northern rock happened .

[apetley]

If a UK bank has a melt down you are only guaranteed about 20 ,000 sterling back ,no matter how much you have with them .Recently they did increase this amount a bit i think ? Most people would not have known this till Northern rock happened .

I think it now stands at 35k GBP.

[guava]

People generally trust banks without question, and they are still probably the safest all round place to keep money, but at the end of the day there is always risk, banks do sometimes go under and people get burnt. I'd imagine every bank in the world has some sort of limitation of liability clauses worked into the fine print. Some governments no doubt protect account holders better than others. Foreign currency accounts are higher than normal risk for the banks - maybe 80% is industry standard for this type of account. Maybe it's better that normal. If you find out please share.

Anyway, my point is that it's not that hard to comprehend, and it's not likely to be a completely new thing either - maybe the percentages have changed. I'm not stating this as fact but it seems a reasonable assumption I think. Personally I'd be very unlikely to have any more than a few percent of my total worth ever sitting idle in any one bank account. Superannuation, investment funds, the stock market etc - now there's a few places to dump your money and generate sleepless nights. I wish the stock market could guarantee 80% of my capital.