webfact Posted January 13, 2012 Share Posted January 13, 2012 Deposits will be protected, says finance minister Seetalavajit Sabayjai Sucheera Pinijparakarn The Nation Depositors of commercial banks will be protected by the Finance Ministry if their interest is adversely affected by the recent executive decrees, while the central bank will raise the issue of unfair competition between commercial banks and state-run banks with Finance Minister Thirachai Phuvanatnaranubala. Thirachai said yesterday that he would soon ask the Cabinet to approve his proposal to provide adequate funding to the Deposit Protection Agency (DPA) if part of the agency's funding is used to pay off the Bt1.14-trillion debt of the Financial Institutions Development Fund (FIDF) left over since the 1997 financial crisis. His comments came after critics sharply attacked the debt executive decree, saying it would hit the funding of the DPA and warned that inadequate funding would pose serious trouble if some banks fail and investors lost their deposits. The DPA was created to provide compensation to depositors, at up to Bt1 million per savings account. Thirachai said the DPA currently has accumulated premiums collected from commercial banks of about Bt80 billion. Thirachai assured banks that the premiums would not be high, as the government does not want to increase the cost for banks, which could result in banks passing on the cost to customers. "A premium rise by 0.2 per cent, or total premium not exceeding 0.6 per cent of total deposits, is adequate to pay off the debt of the FIDF in 25 years," he said. Also, as the baht has started to depreciate against the US dollar, the central bank will make profits from its market operations, he said. The profits would also be used to pay off the debt. Meanwhile, the Bank of Thailand (BOT) said it would raise with the Finance Ministry concerns about the banking industry's distorted structure if commercial banks are required to contribute higher fees, which are planned to service the FIDF debts. The move follows a meeting of the Financial Institutions Policy Committee (FIPC) yesterday. The central bank will have a discussion with the Finance Ministry after a meeting of the Thai Bankers' Association (TBA) next week. The central bank will also propose ways to repay the interest burden and principal then. The BOT governor and the TBA met on Thursday to discuss the planned executive decree related to the FIDF debt and the part relevant to commercial banks. "The commercial banks expressed their concerns over this issue and we brought it before the FIPC, which passed a resolution that we should give their opinion to the Finance Ministry," BOT Governor Prasarn Trairatvorakul said. This is about advantages and disadvantages between commercial banks and state-run specialised financial institutions (SFIs), he added. There is already a problem, as commercial banks are required to contribute 0.4 per cent of their deposit base to the DPA while SFIs are not. "We need to have a level playing field [in the banking industry]," Prasarn said. TBA president Chartsiri Sophonpanich said on Thursday night after meeting Prasarn that any action had to take into account the impact on the competition of commercial banks. Some bankers were worried that the increasing cost from the rising premiums levied on them could make them less competitive than other banks in the region, especially with the 2015 Asean Economic Community bringing about full liberalisation of the financial market. Meanwhile, in a related development, bank lending in response to last year's severe flooding has increased more than expected and it will boost growth in the first quarter, said Thirachai. Thirachai said economic recovery will begin in the first quarter of this year and gross domestic product is expected to expand 2.6 per cent. The full year's growth is forecast to be 5 per cent. Since late last year, new bank lending has increased to almost Bt200 billion, at a pace faster than expected, he said. -- The Nation 2012-01-14 Link to comment Share on other sites More sharing options...
exeter Posted January 14, 2012 Share Posted January 14, 2012 It is hoped that all small investors, thai or foreingers, would also recieve protection from any adverse conditions. It would be a positive move if the government could guarantee the deposits in banks from individual small savers up to say 5million bts, just in case one of them went out of business. 1 Link to comment Share on other sites More sharing options...
meatboy Posted January 14, 2012 Share Posted January 14, 2012 what about our deposits? Link to comment Share on other sites More sharing options...
ableguy Posted January 14, 2012 Share Posted January 14, 2012 what about our deposits? More government BS Link to comment Share on other sites More sharing options...
blackthorn2005 Posted January 14, 2012 Share Posted January 14, 2012 what about our deposits? More government BS The writing is on the wall, time to abandon ship! Link to comment Share on other sites More sharing options...
exeter Posted January 14, 2012 Share Posted January 14, 2012 what about our deposits? More government BS The writing is on the wall, time to abandon ship! Exactly what writing are you seeing? Please enlighten me, do you think there is another agenda going on here that will not be good for we visitors/immigrant/expats etc? Link to comment Share on other sites More sharing options...
astral Posted January 14, 2012 Share Posted January 14, 2012 The fact that these promises are being made, gets me worried. Link to comment Share on other sites More sharing options...
pepi2005 Posted January 14, 2012 Share Posted January 14, 2012 I think I heard one time that private deposits are protected for as much as 100,000 Baht, does anyone have reliable information about this other than rumors? Link to comment Share on other sites More sharing options...
Beetlejuice Posted January 14, 2012 Share Posted January 14, 2012 Don`t start panicking yet. As usual this is another crap report with the most important parts excluded. These are the actual facts: Thailand’s Deposit Insurance Law: Recent Changes and How They Can Affect You http://www.thailawforum.com/thai-deposit-insurance-law.html Link to comment Share on other sites More sharing options...
JohnPolo Posted January 14, 2012 Share Posted January 14, 2012 It's scary how much Thai bashing goes on at ThaiVisa. I really think people should try and be a little more moderate. For those too lazy to go to the link so kindly provided by Beetlejuice, the current GOVERNMENT Deposit Protection Insurance scheme covers up to 50 million baht per depositor per bank. That will change in August 2012 however .... My advice is if you are in doubt about anything, why not spend a few minutes doing a bit of research. It's easy enough - just Google it. Link to comment Share on other sites More sharing options...
kimamey Posted January 14, 2012 Share Posted January 14, 2012 It's scary how much Thai bashing goes on at ThaiVisa. I really think people should try and be a little more moderate. For those too lazy to go to the link so kindly provided by Beetlejuice, the current GOVERNMENT Deposit Protection Insurance scheme covers up to 50 million baht per depositor per bank. That will change in August 2012 however .... My advice is if you are in doubt about anything, why not spend a few minutes doing a bit of research. It's easy enough - just Google it. Sounds good advice to me. Link to comment Share on other sites More sharing options...
bkk_mike Posted January 14, 2012 Share Posted January 14, 2012 (edited) If the scheme covers 50m baht per depositor, and has 80bn baht in it, I foresee only the 1600 largest depositors (with over 50m each on deposit) getting any money at all from the scheme. Edited January 14, 2012 by bkk_mike Link to comment Share on other sites More sharing options...
RogueLeader Posted January 14, 2012 Share Posted January 14, 2012 "unfair competition between commercial banks and state-run banks" Bend over Thailand - the privatisation train is rolling into town. Link to comment Share on other sites More sharing options...
12DrinkMore Posted January 14, 2012 Share Posted January 14, 2012 My advice is if you are in doubt about anything, why not spend a few minutes doing a bit of research. It's easy enough - just Google it. Because research and reasoning are in short supply around here, and anyway, those few minutes could be spent posting even more rubbish.... Link to comment Share on other sites More sharing options...
personchester Posted January 14, 2012 Share Posted January 14, 2012 It's scary how much Thai bashing goes on at ThaiVisa. I really think people should try and be a little more moderate. For those too lazy to go to the link so kindly provided by Beetlejuice, the current GOVERNMENT Deposit Protection Insurance scheme covers up to 50 million baht per depositor per bank. That will change in August 2012 however .... My advice is if you are in doubt about anything, why not spend a few minutes doing a bit of research. It's easy enough - just Google it. Sounds good advice to me. If after August 2012 the protection figure of 50.M. goes down to 100.K. then foreigners that need a Thai bank balance of 800 K. for a retirement visa application will obviously have to say good bye to 700.K. Foreigners married to Thai women need a 400.K. bank balance for their visa application, they will have to say au revoir to 300.K. However, be this as it may, I don't think Thai banks will face serious financial problems, however, should a bank fail, then there is no doubt that the Thai government will provide total protection for depositors, but perhaps not entirely for investors. In any event, we should keep alert in this field. Link to comment Share on other sites More sharing options...
herb59 Posted January 14, 2012 Share Posted January 14, 2012 100K is NOT 1,000.000,- Baht Link to comment Share on other sites More sharing options...
12DrinkMore Posted January 14, 2012 Share Posted January 14, 2012 (edited) If after August 2012 the protection figure of 50.M. goes down to 100.K. then foreigners that need a Thai bank balance of 800 K. for a retirement visa application will obviously have to say good bye to 700.K. Foreigners married to Thai women need a 400.K. bank balance for their visa application, they will have to say au revoir to 300.K. However, be this as it may, I don't think Thai banks will face serious financial problems, however, should a bank fail, then there is no doubt that the Thai government will provide total protection for depositors, but perhaps not entirely for investors. In any event, we should keep alert in this field. The protection goes down to 1,000,000 baht per bank, so all your examples are rubbish. In any case, it is utterly improbable that one of the major banks in Thailand would suddenly become insolvent and have zero cash to pay any creditor. Unlike the European banks, the Thai banks have not issued vast amounts of subprime debt to basket cases. That lesson was learned in 1997. The Thai banks are not surviving on central bank zero interest rate funding, unlike the western banks. And Thailand, despite disbelief among people around here, has a growing economy without the huge burden of pensions, state employees, unemployment, unions, public and private debt that will keep the west in a permi-recession for the next decade. Edited January 14, 2012 by 12DrinkMore Link to comment Share on other sites More sharing options...
personchester Posted January 15, 2012 Share Posted January 15, 2012 If after August 2012 the protection figure of 50.M. goes down to 100.K. then foreigners that need a Thai bank balance of 800 K. for a retirement visa application will obviously have to say good bye to 700.K. Foreigners married to Thai women need a 400.K. bank balance for their visa application, they will have to say au revoir to 300.K. However, be this as it may, I don't think Thai banks will face serious financial problems, however, should a bank fail, then there is no doubt that the Thai government will provide total protection for depositors, but perhaps not entirely for investors. In any event, we should keep alert in this field. The protection goes down to 1,000,000 baht per bank, so all your examples are rubbish. In any case, it is utterly improbable that one of the major banks in Thailand would suddenly become insolvent and have zero cash to pay any creditor. Unlike the European banks, the Thai banks have not issued vast amounts of subprime debt to basket cases. That lesson was learned in 1997. The Thai banks are not surviving on central bank zero interest rate funding, unlike the western banks. And Thailand, despite disbelief among people around here, has a growing economy without the huge burden of pensions, state employees, unemployment, unions, public and private debt that will keep the west in a permi-recession for the next decade. A civilised person with gentlemen like manners would not have responded in the vulgar way you did in your first paragraph. A civilised person would have stated that the Thai governments bank protection scheme after August 2012 would be reduced to 1Mill. and not 100.K., end of story ... Your mannerism as outlined above is indicative of a raffish street type trader. Link to comment Share on other sites More sharing options...
12DrinkMore Posted January 15, 2012 Share Posted January 15, 2012 A civilised person with gentlemen like manners would not have responded in the vulgar way you did in your first paragraph. A civilised person would have stated that the Thai governments bank protection scheme after August 2012 would be reduced to 1Mill. and not 100.K., end of story ... Your mannerism as outlined above is indicative of a raffish street type trader. A prudent person would have checked the facts before making a post containing misleading examples based on incorrect information and possibly causing unnecessary headaches. Link to comment Share on other sites More sharing options...
RogueLeader Posted January 15, 2012 Share Posted January 15, 2012 In any case, it is utterly improbable that one of the major banks in Thailand would suddenly become insolvent and have zero cash to pay any creditor. You think? Banks don't have much actual cash. All banks operate on a reserve principle. If the credit system collapses, all banks are insolvent. Of course, that would never happen... Link to comment Share on other sites More sharing options...
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