Editorial: Kittiratt Fails To Oversee Banking Sector

[Ricardo]

I have money. Please tell me how I can make a "killing".

Short the Thai Baht.....(Just like Thaksin did last time the Baht when thunk! ).

This works much better when you are the serving deputy finance minister with insider knowledge that the baht will be devalued, by how much, on what date, as Thaksin was back in '97.

Zero risk, and as much reward as you want.

No wonder he is so widely admired, for his 'business' acumen !

[Robby nz]

IBank caters to Muslim customers, operating on Shariah principles.

Was wondering what Shariah banking principles might be?

[geriatrickid]

and you think that's a bad thing ?

I've seen people in the west get away with several scams because once they "seemingly" or their company get into trouble they escape with the proceeds only to do it all again with a partner or accomplice, companies not people in the west go bankrupt - it's a scam of the higest order and when the banks get into trouble it's the people that bail out the banks - double wammy

Not entirely. I'm biased as I have no debt, nor have I ever borrowed to finance a purchase, yet I realize there has to be fairness and common sense. It seems to be an all or nothing approach. People do lose their jobs, or suffer personal tragedy that can cause them to default on a debt. Yes, there will alwys be people that will take advantage, but in many cases the financial institution has to take reponsibility because it provided the funding to people that could not service the debt. We see that with the credit card companies in the west that allow card holders to run up debt all because the allure of exorbitant interest rates make for a nice profit. Get enough people paying the quasi usury rates and you can afford the risk of a few deadbeats. Maybe if credit card companies were not allowed to charge 15-25% interest rates, alot of people would not be in such a precarious position. That doesn't mean I approve of the thousands of people that bugger off on their debt obligations, but the financial institutions have to stop enabling the behaviour. The FIs can do that because they are backstopped by respective governments. It's a deck of cards waiting to collapse .We're seeing it in Spain with residential mortgages. The mortgage holder is responsible for the full debt even after the bank sells off the home, and there are literally hundreds of thousands of elderly and young families pushed into poverty because of the draconian approach to debt. Mind you, as long as Germany and the UK keep financing the Spanish bank bailouts, perhaps the inevitable can be delayed.

I am still in disbelief that my friend who makes 30,000 baht per month, with expenses including the support of a mother with dementia that consume all his pay, was allowed to take a car loan despite being a cosigner on his sister's expensive Mercedes and still carrying 300,000 baht in student loans. He has his student loans with the state bank and is on a repayment of schedule of 2500 baht/month, which he is behind on. He should never have been given car financing. He's a financial crisis waiting to happen. So much for his his business degree.

In respect to the current finance minister, I have previously stated that I think he should never have been appointed and that Thirachai Phuvanatnaranubala should have been left in the position. Kittirat and former finance minister Korn are cut from the same cloth, guys that came from the stock market sector.. The honourable Thirachai was a low key minister that wanted to reign in debt. He was considered too "old fashioned", too conservative. Maybe at 61 when appointed finance minsiter he remembered the financial crises of the 70's and 90's. IMO, it was the biggest mistake of the Yingluck admin to replace him.

[smedly]

and you think that's a bad thing ?

I've seen people in the west get away with several scams because once they "seemingly" or their company get into trouble they escape with the proceeds only to do it all again with a partner or accomplice, companies not people in the west go bankrupt - it's a scam of the higest order and when the banks get into trouble it's the people that bail out the banks - double wammy

Not entirely. I'm biased as I have no debt, nor have I ever borrowed to finance a purchase, yet I realize there has to be fairness and common sense. It seems to be an all or nothing approach. People do lose their jobs, or suffer personal tragedy that can cause them to default on a debt. Yes, there will alwys be people that will take advantage, but in many cases the financial institution has to take reponsibility because it provided the funding to people that could not service the debt. We see that with the credit card companies in the west that allow card holders to run up debt all because the allure of exorbitant interest rates make for a nice profit. Get enough people paying the quasi usury rates and you can afford the risk of a few deadbeats. Maybe if credit card companies were not allowed to charge 15-25% interest rates, alot of people would not be in such a precarious position. That doesn't mean I approve of the thousands of people that bugger off on their debt obligations, but the financial institutions have to stop enabling the behaviour. The FIs can do that because they are backstopped by respective governments. It's a deck of cards waiting to collapse .We're seeing it in Spain with residential mortgages. The mortgage holder is responsible for the full debt even after the bank sells off the home, and there are literally hundreds of thousands of elderly and young families pushed into poverty because of the draconian approach to debt. Mind you, as long as Germany and the UK keep financing the Spanish bank bailouts, perhaps the inevitable can be delayed.

I am still in disbelief that my friend who makes 30,000 baht per month, with expenses including the support of a mother with dementia that consume all his pay, was allowed to take a car loan despite being a cosigner on his sister's expensive Mercedes and still carrying 300,000 baht in student loans. He has his student loans with the state bank and is on a repayment of schedule of 2500 baht/month, which he is behind on. He should never have been given car financing. He's a financial crisis waiting to happen. So much for his his business degree.

In respect to the current finance minister, I have previously stated that I think he should never have been appointed and that Thirachai Phuvanatnaranubala should have been left in the position. Kittirat and former finance minister Korn are cut from the same cloth, guys that came from the stock market sector.. The honourable Thirachai was a low key minister that wanted to reign in debt. He was considered too "old fashioned", too conservative. Maybe at 61 when appointed finance minsiter he remembered the financial crises of the 70's and 90's. IMO, it was the biggest mistake of the Yingluck admin to replace him.

so you never bought anything on finance ? well I've got news for you - your government did it for you and now you're up to your eyeballs in debt whether you like it or not - you are paying for it

reality check

[jbrain]

I am still in disbelief that my friend who makes 30,000 baht per month, with expenses including the support of a mother with dementia that consume all his pay, was allowed to take a car loan despite being a cosigner on his sister's expensive Mercedes and still carrying 300,000 baht in student loans. He has his student loans with the state bank and is on a repayment of schedule of 2500 baht/month, which he is behind on. He should never have been given car financing. He's a financial crisis waiting to happen. So much for his his business degree.

I suggest you enter your post in this thread, as it would indicate that the OP of that thread has it with the right end.

[jbrain]

\ The honourable Thirachai was a low key minister that wanted to reign in debt. He was considered too "old fashioned", too conservative. Maybe at 61 when appointed finance minsiter he remembered the financial crises of the 70's and 90's. IMO, it was the biggest mistake of the Yingluck admin to replace him.

If someone is stands in the way of your self enriching scams goals you replace him. Not ?

[smedly]

This government seems to have given the Thai people an endorcement to borrow as much as they want and it will be covered by the state - the government itself is borrowing heavily

I can't help getting the feeling that someone wants Thailand to go into meltdown - who is going to cover all the debt

Thailand the Hub of Debt in Asia - perhaps a true picture yet to uncoververed because of deception and lies

[dcutman]

At this point, the situation at the two state-run banks is unlikely to

hurt the entire system. However, if the authorities fail to apply a

credible system of oversight, the crisis of confidence could spill over

to other state-run banks. Effective action is required before it is too

late.

According to the article in the other paper March 8, 2012 Bad loans at state banks

Most state banks are in a similar position, as its non-performing loan levels are probably higher than reported.

Probably they are, but

>That crisis started off with the disclosure of NPLs at some small banks, which caused a loss of public confidence in financial institutions.

So this time the denial will be so predominated that at the time the sh*t hits the fan is will be much worse than 1997.

BoT Governor: unusual withdrawal rate at 2 banks unworrisome

BANGKOK, Feb 26 – The excessive withdrawal of deposits from two

specialised state-operated banks--Bt4.8 billion in 20 days--will not

affect the country’s financial institutions system, Bank of Thailand

(BoT) Governor Prasarn Trairatvorakul said today. http://www.mcot.net/site/content?id=512c8deb150ba0d217000017#.US1_LVdP_yU

The NESDB also reported a continued surge in household debt, with

outstanding debts for personal consumption hitting 2.9 trillion baht, up

by 21.6%.

In the fourth quarter, hire-purchase for cars and motorcycles, as well as personal loans rose by 33.9% and 29.4%.

Defaults on loans under supervision and credit card loans increased

by 28.1% and 3.3%. Non-performing loans for personal

consumption also grew by 20.5%.In 2011, household savings contributed only 5.3% to gross domestic

product, NESDB showed as many as 45% of 9.09 million households had no ability to save.

[waza]

At this point, the situation at the two state-run banks is unlikely to

hurt the entire system. However, if the authorities fail to apply a

credible system of oversight, the crisis of confidence could spill over

to other state-run banks. Effective action is required before it is too

late.

According to the article in the other paper March 8, 2012 Bad loans at state banks

Most state banks are in a similar position, as its non-performing loan levels are probably higher than reported.

Probably they are, but

>That crisis started off with the disclosure of NPLs at some small banks, which caused a loss of public confidence in financial institu

tions.

So this time the denial will be so predominated that at the time the sh*t hits the fan is will be much worse than 1997.

BoT Governor: unusual withdrawal rate at 2 banks unworrisome

BANGKOK, Feb 26 – The excessive withdrawal of deposits from two

specialised state-operated banks--Bt4.8 billion in 20 days--will not

affect the country’s financial institutions system, Bank of Thailand

(BoT) Governor Prasarn Trairatvorakul said today. http://www.mcot.net/site/content?id=512c8deb150ba0d217000017#.US1_LVdP_yU

The NESDB also reported a continued surge in household debt, with

outstanding debts for personal consumption hitting 2.9 trillion baht, up

by 21.6%.

In the fourth quarter, hire-purchase for cars and motorcycles, as well as personal loans rose by 33.9% and 29.4%.

Defaults on loans under supervision and credit card loans increased

by 28.1% and 3.3%. Non-performing loans for personal

consumption also grew by 20.5%.In 2011, household savings contributed only 5.3% to gross domestic

product, NESDB showed as many as 45% of 9.09 million households had no ability to save.

This is not the rosey picture some economic gurus are trying to paint.

[dcutman]

At this point, the situation at the two state-run banks is unlikely to

hurt the entire system. However, if the authorities fail to apply a

credible system of oversight, the crisis of confidence could spill over

to other state-run banks. Effective action is required before it is too

late.

According to the article in the other paper March 8, 2012 Bad loans at state banks

Most state banks are in a similar position, as its non-performing loan levels are probably higher than reported.

Probably they are, but

>That crisis started off with the disclosure of NPLs at some small banks, which caused a loss of public confidence in financial institu

tions.

So this time the denial will be so predominated that at the time the sh*t hits the fan is will be much worse than 1997.

BoT Governor: unusual withdrawal rate at 2 banks unworrisome

BANGKOK, Feb 26 – The excessive withdrawal of deposits from two

specialised state-operated banks--Bt4.8 billion in 20 days--will not

affect the country’s financial institutions system, Bank of Thailand

(BoT) Governor Prasarn Trairatvorakul said today. http://www.mcot.net/site/content?id=512c8deb150ba0d217000017#.US1_LVdP_yU

The NESDB also reported a continued surge in household debt, with

outstanding debts for personal consumption hitting 2.9 trillion baht, up

by 21.6%.

In the fourth quarter, hire-purchase for cars and motorcycles, as well as personal loans rose by 33.9% and 29.4%.

Defaults on loans under supervision and credit card loans increased

by 28.1% and 3.3%. Non-performing loans for personal

consumption also grew by 20.5%.In 2011, household savings contributed only 5.3% to gross domestic

product, NESDB showed as many as 45% of 9.09 million households had no ability to save.

This is not the rosey picture some economic gurus are trying to paint.

This report is about 2011, I believe we will find the 2012 numbers increasing similarly, I was just reading in the other paper, Bangkok bank is diving in deep with unsecured loans, in the past they have not played this game and now they are trying to keep up with all the other banks doing the same.

[Bagwan]

Correct me if the law has changed, but my understanding is that there is no "Voluntary" bankruptcy in Thailand. In The USA and Canada, it is relatively to declare bankruptcy and just walk away from debt. It is not so easy for a debor to escape from financial obligations in Thailand. Everything gets seized. It is even worse for many debtors because the usually have cosigners, which means the cosigner is subject to having assets seized as well.

According to Thai Bankruptcy Act B.E. 2483 (A.D..1 940), any debtor who is faced with financial difficulties cannot file a petition for bankruptcy. Instead, he or she has to wait for a creditor or creditors to file a bankruptcy petition against him or her, Individual debtors who do not have their creditors file a bankruptcy charge against them cannot take advantage of section 81 / 1 of the Act. Proceedings for reorganizing the business of a debtor under Chapter 3/1 apply only to the debtor who is a limited company, a public limited company or other juristic persons as provided in the ministerial regulations. The individual debtor cannot utilize the provisions in

Chapter 3/ 1. Therefore, Thai individual debtors do not have the chance to begin a `fresh start' voluntarily. When a debtor is placed under the receivership order, all of his or her assets save necessary items will be seized and he or she cannot perform any juristic acts. If the debtor is a government official when the court declares him or her a bankrupt, then that individual has to quit his or her job.

I never knew how harsh it could be. You can't really run away from debt in Thailand as the laws favour the debt holder.

It's as bad as it gets here GK. If you own say a USD 200k property here and have a loan/mortgage for USD 80 K against it, if you default the bank will take absolutely everything. In the UK the bank would sell the property and once its costs are recovered those in debt would get what is left. In Thailand they will sell your 200K home for 200K to recover the 80K debt and keep the lot. I have also seen people brought to their knees because they became a cosigner for someone. For everyone out there, if you wife/gf/bf/husband is Thai or you have good thai friends, do not let them cosign for anyone. A woman near us lost her house she was aged 62 when a 'relative' with a swish car didn't pay the loan and buggered off, with car of course, leaving her to pay the bill for everything. She is now destined to spend her final years in a tiny one room shack with no hope of recovery and no Government help.

In regard to the UK situation it would be more accurate to say that the lender would put the asset up for auction rather than selling it which implies that they exercise some control over the price. If the price that the asset raised at auction is less than the amount owing then the debtor is still a debtor and further action may be taken. Civil court actions are notoriously difficult to enforce and more often than not the only downside for the debtor is that failure to settle as ordered by the Court is noted by the credit agencies and such information will remain in the public domain for 6 years.

It is known only to a favoured few when and where auctions by financial services providers and other organisations are held. It is not unusual for there to be collusion between bidders to keep the going price low. Thus, relatives of a solicitor or a bank manager for example, can pick up a property or a vehicle at 50% of it's true market price and then sell it on. At auctions where HM Customs dispose of seized goodies it is possible to acquire practically anything for little money. Not paying your VAT can be very expensive.