Bank Of Thailand Eases Rule On Single Lending Cap

[webfact]

BOT eases rule on single lending cap
Sarun Kijvasin
The Nation

BANGKOK: -- The Bank of Thailand will temporarily relax the single lending limit rule to companies under a group to more than 25 per cent of the lender's Tier 1 capital base, according to a report by the central bank.

The current rule prohibits banks from lending more than 25 per cent of their Tier 1 capital to a single client.

According to the report, the BOT wants the rule to be eased in line with the demand for lending of large companies, while the activities of conglomerates can help strengthen the local economy.

Earlier, some banks urged the central bank to revise the rule because the single lending limit makes it difficult for banks to support large loan demands from big corporate customers to fund overseas expansion, including mergers and acquisitions.

The activities of larger companies needed the financial support of banks, they argued.

The BOT last month told the commercial banks it was about to relax the single lending limit rule. The relaxation is based on the capital add-on in line with the global standard that gives

importance to the concentration of risk.

After relaxation of the rule, commercial banks will be able to lend more than 25 per cent of their Tier 1 capital, but they are also required to increase capital reserves, starting on

April 1.

However, the central bank has given commercial banks until January 2015 to adjust by allowing them to reveal their capital ratio and BIS ratio after deducting the reserve.

Despite the rule relaxation, banks will offer a credit line to larger companies of not less than 20 per cent of their outstanding loans. Siritida Panomwon na Ayudhya, a senior BOT director, said commercial banks would be more cautious in giving loans because they are required to reserve the increased capital as well.

At present, about four or five medium-sized and large banks have granted loans to conglomerate companies of more than 25 per cent of their Tier 1 capital.

The BOT, however, will relax the rule for commercial banks on a case-by-case basis depending on the capital ratio of each bank.


-- The Nation 2013-03-06

[belg]

is it just me, lending large amounts to companies (that can also go bankrupt), massive loss of money with rice pledging scam, PRICES OF RICE GOING DOWN WORLDWIDE (check bloomberg for that), massive corruption, 5 new SUPER RICH added to forbs... some people are getting super rich and the rest of the country will go down ... masterplan of mister T ?

[chiangmaikelly]

is it just me, lending large amounts to companies (that can also go bankrupt), massive loss of money with rice pledging scam, PRICES OF RICE GOING DOWN WORLDWIDE (check bloomberg for that), massive corruption, 5 new SUPER RICH added to forbs... some people are getting super rich and the rest of the country will go down ... masterplan of mister T ?

What was the percent of the GDP lost to the rice pledging scheme?

[worgeordie]

is it just me, lending large amounts to companies (that can also go bankrupt), massive loss of money with rice pledging scam, PRICES OF RICE GOING DOWN WORLDWIDE (check bloomberg for that), massive corruption, 5 new SUPER RICH added to forbs... some people are getting super rich and the rest of the country will go down ... masterplan of mister T ?

Maybe, When Thailand goes down the drain, he can ride in on a white horse and save the country

regards Worgeordie

[worgeordie]

is it just me, lending large amounts to companies (that can also go bankrupt), massive loss of money with rice pledging scam, PRICES OF RICE GOING DOWN WORLDWIDE (check bloomberg for that), massive corruption, 5 new SUPER RICH added to forbs... some people are getting super rich and the rest of the country will go down ... masterplan of mister T ?

What was the percent of the GDP lost to the rice pledging scheme?

The GDP is not lost yet until the rice goes bad,gets eaten by rats and birds,and lots disappear out the back door,never mind the cost of

the rice buying to the GPD, think what the storage costs are every month !!!

regards Worgeordie

[marcusd]

I think the HIDDEN AGENDA behind this story which goes back at least a year now is the fact that THIS GOVERNMENT went overseas and BORROWED a lot of lovely moolah (money) from American and European banks (yes they printed a fe more notes) and Thailand wratched up a 49% debt to GDP (which they make up as they need more money) and a lot of this was not used up.

They sold about 1.3million new cars last year (we sold 1.2million in Australia with just 22million people as a measure of how valuable the Thai car market is) and after all the government rebates LINNYLUCK found she still had oodles of money not yet taken up. So a bunch of cronies operating large companies they AAQUIRED the knowledge to run (I think they said I am in goovernment GIVE ME HEAPS OF SHARES) and now they want to get their hands on the rest of that unborrowed money.

And Linnyluck went and got more this year for infrastructure projects into the next five years because it was really easy getting the first lot of money... she just signed an I O U and said YES we will pay it back... (thus the baht is artificallay raised so interest repayments are lower (learned this off yanks by keeping rates down they can borrow more at same repayment cost..)

So linnyluck is a fast learner and is BORROWIUNG MORE because she can and will and distribute heaps more to her friends. In the next chapter we see how there is a big world bang and linny tells her friends "we dont have to pay now as we say SOLLY NO MONEY NO HONEY"

And that my dear friends is the end of the story. Goodnight.