Govt To Ask 33 Banks For Rice Money Loans

[theslime]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

While I agree with you on premise, foreign banks have local risk thresholds and expected rates of return. They don't concern themselves with politics, only risk and return. As they are looking at MOF risk and as these are supposed to be short term loans, some may be interested.

Banks that under BOT auspices are required to pay for depositor insurance. Therefore, depositors are insured up to THB 50million per depositor per bank. Union heads have been fearful of their depositors money that are not under the BOT insurance program, which is apparently the case for the BAAC, GHB, GSB, and GPF.

Krung Thai Bank is a large government bank whose depositors are under the BOT insurance . Hence, there should be no issues from the unions about depositor risk, nor about MOF risk since it is owned by the government. Only KTB, as far as I understand, is government owned and their depositors have private depositor insurance. This aside, it will depend on their capital adequacy position, which is public knowledge, but I haven't looked at. If it rates well,the funds may well be available.

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Foreign banks don't want to get involved with political hot potatoes.

These can easily be blown up by activist groups that stalk AGMs in their home countries. So most avoid anything vaguely political.BAAC, GSB et al are not regulated by BOT. KTB is not wholly owned by government. It is public listed company with many minority shareholders. It has often been subjected to political pressure in the past but directors have same liability to all shareholders as other listed banks. I don't think KTB wants to go back to its dark age of being regarded as a piggy bank for corrupt politicians after so many years hard work improving its corporate governance ratings with local and foreign investors.

Sent from my iPhone using Thaivisa Connect Thailand

Activist,another Name for a Doer. Stalking AGM,s at Home, how Preprosperous, how dare people complain.

[Robby nz]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

You forgot the other Govt bank the Islamic bank which it was reported elsewhere today has 29% of NPL amounting to 32 billion B

[siampolee]

This puppet corrupt administration is dead in the water, hence they have no credit worthiness among the voters.

Yet again though the P.T.P.puppets ask for loans to be paid back by the taxpayers so as the puppets hope they can secure enough leverage financially and politically to buy the gullible electorate and as a result to vote the P.T.P. back into power so as their rampant theft and corruption and personal enrichment of one f creature and its clan can continue.

It isn't going to work any more P.T.P. are a past political corrupt nightmare.

[IMA_FARANG]

So when we get a statement from the head criminal in Dubai himself that he will personally kick in a few million Baht of his own money to help pay the farmers bills?

Anybody think that such a thing will happen?

So far I haven't seen any pigs flying around Bangkok, has anyone else seen any?

[Mosha]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

You forgot the other Govt bank the Islamic bank which it was reported elsewhere today has 29% of NPL amounting to 32 billion B

Watch the extreme south really kick off if they use the Islamic Bank to bale out the government.

Edited January 28, 2014 by Mosha

[daboyz1]

So when we get a statement from the head criminal in Dubai himself that he will personally kick in a few million Baht of his own money to help pay the farmers bills?

[IMA_FARANG]

It was a doom from the beginning, PM's Brother's big ideas. He forgot to tell her where the money would come from.

Thailand is just like a lot of the Asian, African countries, they fiddle so much that they forget they have to some way put it back in the purse.

They do not know a country has to be run like a business and make a profit.

----------------------

If was the CEO of a commercial bank I would laugh right in the government spokesman's face.

This Rice scheme relies of the government being able to SELL the rice they have pledged for.

And they can't because their selling price for the stored pledged rice is higher than potential buyers can find on the open market from neighboring countries.

Vietnam and Cambodia for instance will sell rice of the same quality as Thailand, but at a lower price.

Vietnam, for example, is selling Rice to foreign buyers and those sales increased dramatically last year, as Thailand sales fell.

To put any money into the Rice scheme as it is now structured is a fool's venture and a money losing proposition unless the Rice pledge is lowered.

And for political reasons the government can't do that.

[aimbc]

The government has enough money. They just can't access it because the government is in "caretaker" mode due to the elections.

So, basically ..the farmers are not being paid thanks to Suthep.

So, basically ..the farmers are not being paid thanks to Suthep.

So why haven´t the farmers been paid since Oktober? Why didn´t the PTP paid the money before they become a caretaker government? Simple, they have run out of money.

Yes this loan is very fishy, it was not long ago that the PT had said gthey had allocated a 180 billion baht budget of which they had provided the BAAC 150 billion from rices sales. Which meant they were 'only' 30 billion short for this year's harvest. Now suddenly the shortfall has become 130 billion. Whats going on here?

Now that they approved for a loan of 130billion, but weren't they able to acquire some from bonds and not all of it. So essentially, they can't borrow more than the amount left over. Or did they approved for a much higher amount.

[tingtongteesood]

Maybe we should just all donate our Thai bank accounts to the govt....help a struggling govt out--NOT!!!

Suthep doesn't like foreigners. Maybe he can arrange to "seize the assets" (all the 800K deposits) of retirees in LOS when he seizes YL assets. That might pay off a few farmers, eh?

This would be especially appropriate for the TV Suthep supporters.

WHAT A LOAD OF <deleted> !

[tsnyder]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

While I agree with you on premise, foreign banks have local risk thresholds and expected rates of return. They don't concern themselves with politics, only risk and return. As they are looking at MOF risk and as these are supposed to be short term loans, some may be interested.

Banks that under BOT auspices are required to pay for depositor insurance. Therefore, depositors are insured up to THB 50million per depositor per bank. Union heads have been fearful of their depositors money that are not under the BOT insurance program, which is apparently the case for the BAAC, GHB, GSB, and GPF.

Krung Thai Bank is a large government bank whose depositors are under the BOT insurance . Hence, there should be no issues from the unions about depositor risk, nor about MOF risk since it is owned by the government. Only KTB, as far as I understand, is government owned and their depositors have private depositor insurance. This aside, it will depend on their capital adequacy position, which is public knowledge, but I haven't looked at. If it rates well,the funds may well be available.

Sent from my iPad using Thaivisa Connect Thailand

Foreign banks don't want to get involved with political hot potatoes.

These can easily be blown up by activist groups that stalk AGMs in their home countries. So most avoid anything vaguely political.BAAC, GSB et al are not regulated by BOT. KTB is not wholly owned by government. It is public listed company with many minority shareholders. It has often been subjected to political pressure in the past but directors have same liability to all shareholders as other listed banks. I don't think KTB wants to go back to its dark age of being regarded as a piggy bank for corrupt politicians after so many years hard work improving its corporate governance ratings with local and foreign investors.

Sent from my iPhone using Thaivisa Connect Thailand

Today:

BANGKOK, 28 Jan 2014, (NNT) - Krung Thai Bank (KTB) has denied rumors on the online social media that it is lending 160 billion baht to the governments rice pledging scheme.

Woraphak Thanyawong, the President of the KTB, made the statement that his bank had not been contacted by the government regarding the issue. According to him, rumors have surfaced since last week, prompting a number of its customers to inquire on the matter.

He urged all to refrain from making assumptions without evidence or using the bank as a political tool.

According to Mr. Woraphak, KTB remains transparent in its operations as it operates under the supervision of the Bank of Thailand, Securities and Exchange Commission, and the office of the Auditor General of Thailand.

http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5701280010002

[Muhendis]

Good business sense put it out to the competitive market...

I'm sure a lot will be whining but at least they are trying to get the farmers paid for what they have already sold on promise.

I see a lot of posters hating the idea of for some reason and have no idea why they would wish hardship on hard working farmers. They deserve to be paid in full asap imo.

Yes I agree. The farmers must be paid however where is the money to come from? If it is borrowed from 30 major banks "they are only concerned by the security and interests from the loan". The Govt./taxpayers will still need to pay it back with interest. That would bother me greatly if I was a bank manager with an election in the offing. The EC may also be concerned that such a plan would impact the election and the future government.

A better and more philanthropic idea would be for the Shin clan to get together and make an unconditional gift to the farmers although I somehow feel this would never happen.

[gemini81]

So our favorite despot lined his own pockets and left ex cronies out to dry again? History repeats itself...the shin corp. for example.

I have a feeling this old despot won't pass away peacefully due to natural causes, for all that he has sewn sooner or later shall he reap.

[Time Traveller]

If I were a commercial bank, I wouldn't even think twice about NOT to extend a loan to this government. It very clear that they're broke - or at the very least hopelessly insolvent. If they can't pay the farmers, the odds that they'll be able to repay my loan plus interest are very bad. Anyhow, what kind of collateral could they possibly offer as security? A luxury mansion in Dubai? Gold mining rights in Uganda? Chalerm's fully-stocked liquor cabinet? No, thanks, I'm not interested. Much too risky.

If you were a commercial bank - you wouldn't exist. All banks hold reserves of Government bonds. There are already loaning the government money, and it's the least risky loans of all on their loan books because the government if it wanted could just print the money to pay back it's obligations. The fact that the government is not paying the farmers is more due to the type of loan than a case of not having the ability to pay.

As a caretaker government they would not be allowed to issue new bonds for this type of spending. With the street protests they have the perfect excuse for non-payment - blame the anti government protesters.

[Old Man River]

The government has enough money. They just can't access it because the government is in "caretaker" mode due to the elections.

So, basically ..the farmers are not being paid thanks to Suthep.

The confusing part is that the farmers have been waiting for up to 6 months, so if the government has enough money why didn't they pay before dissolving the house? I think it's because they didn't have enough money then and they had hoped to have the out of budget (off the books) 2.2 trillion infrastructure loan approved, then they could use that borrowed money to pay for the rice (and continue paying for it until it too was gone - a little cynical perhaps). If they have enough money now, why borrow now?

Actually, the deals with China and Indonesia were supposed to pay them, but these deals didn't go through.

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[Piichai]

If I were a commercial bank, I wouldn't even think twice about NOT to extend a loan to this government. It very clear that they're broke - or at the very least hopelessly insolvent. If they can't pay the farmers, the odds that they'll be able to repay my loan plus interest are very bad. Anyhow, what kind of collateral could they possibly offer as security? A luxury mansion in Dubai? Gold mining rights in Uganda? Chalerm's fully-stocked liquor cabinet? No, thanks, I'm not interested. Much too risky.

If you were a commercial bank - you wouldn't exist. All banks hold reserves of Government bonds. There are already loaning the government money, and it's the least risky loans of all on their loan books because the government if it wanted could just print the money to pay back it's obligations. The fact that the government is not paying the farmers is more due to the type of loan than a case of not having the ability to pay.

As a caretaker government they would not be allowed to issue new bonds for this type of spending. With the street protests they have the perfect excuse for non-payment - blame the anti government protesters.

All banks may or may not hold reserves of government bonds.

And if the bonds are such a sweet deal, why didn't the last round sell out?

[Piichai]

The government has enough money. They just can't access it because the government is in "caretaker" mode due to the elections.

So, basically ..the farmers are not being paid thanks to Suthep.

The confusing part is that the farmers have been waiting for up to 6 months, so if the government has enough money why didn't they pay before dissolving the house? I think it's because they didn't have enough money then and they had hoped to have the out of budget (off the books) 2.2 trillion infrastructure loan approved, then they could use that borrowed money to pay for the rice (and continue paying for it until it too was gone - a little cynical perhaps). If they have enough money now, why borrow now?

Actually, the deals with China and Indonesia were supposed to pay them, but these deals didn't go through.

Or were they fake?

[rubl]

bbk.jpgkas.jpgktb.jpgscb.jpgtmb.jpg

beg.jpg

KTB is state owned as far as I know, just like GSB (Ohm Sin), GHB (Akhran SongKro) and BAAC

[rubl]

Anyway 197 posts later we have the (not-so-)care-taking MoF seeking, hping and finally expecting to clear debts at BAAC owed by the government. Of course a mere 130 billion still eaves us with this annoying 500 billion non-revolving funds and some other additional loans.

Maybe k. Kittirat hopes to be rid of all this misery after the 2nd of February

[Arkady]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

While I agree with you on premise, foreign banks have local risk thresholds and expected rates of return. They don't concern themselves with politics, only risk and return. As they are looking at MOF risk and as these are supposed to be short term loans, some may be interested.

Banks that under BOT auspices are required to pay for depositor insurance. Therefore, depositors are insured up to THB 50million per depositor per bank. Union heads have been fearful of their depositors money that are not under the BOT insurance program, which is apparently the case for the BAAC, GHB, GSB, and GPF.

Krung Thai Bank is a large government bank whose depositors are under the BOT insurance . Hence, there should be no issues from the unions about depositor risk, nor about MOF risk since it is owned by the government. Only KTB, as far as I understand, is government owned and their depositors have private depositor insurance. This aside, it will depend on their capital adequacy position, which is public knowledge, but I haven't looked at. If it rates well,the funds may well be available.

Sent from my iPad using Thaivisa Connect Thailand

Pretty sure BAAC is half owned by Thai Airforce, and the Government owning the other half.

No, BAAC is owned by the Ministry of Finance but the directors still have a duty of care to taxpayers and are liable to criminal prosecution if they violate it's loan regulations. As a state enterprise, it also has a powerful union, unlike commercial banks. The union opposes lending the bank's liquidity to the government which is probably illegal anyway. I would think the union is acting at the board's request to deflect Kittirat's pressure and save them from prosecution.

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[Robby nz]

bbk.jpgkas.jpgktb.jpgscb.jpgtmb.jpg

beg.jpg

KTB is state owned as far as I know, just like GSB (Ohm Sin), GHB (Akhran SongKro) and BAAC

There is also the SME bank.

Remember reading that the GSB, KTB and K banks were going to lend the 360 billion for the flood work with 200 billion from the GSB, don't know if that went through or not.

Kittaratt also said that Thai banks were expected to provide 60% of the 2.2 trillion, and later that Thai banks had enough liquidity to cover all the 2.2 trillion.

[tim armstrong]

Told you so. The government is cash broke. Wonder where the money has gone ?

[almafudd]

The government is using off balance sheet financing for the rice scheme, to hide the losses.

They are not even willing to tell tax payers what the losses are exactly.

Supporting poor people is fine; but I recommend just sending them a check in the mail, properly accounted for (as it is tax payers' money). Subsidizing farmers by rigging the whole rice market and trying to hide the losses is just plain stupid.

What are the losses exactly?

Who knows?!

They are the future selling price of the rice, minus the price paid, plus the interest on any bond financing used to bridge the time needed to sell it.

So what is the future selling price of the rice exactly? Not known, nobody has a crystal ball.

And how much will the bond finance cost? A lot more now that Suthep scuppered the bond issue, and drove down the value of the Thai baht, but basically nobody knows for sure, because the bonds haven't yet been issued and can't be till the election is over.

And how long will it take to sell the backlog? Don't know, depends on the weather/world rice supplies & demands.

So it's not possible to calculate an exact loss because the loss isn't known and on the books until the capital item (rice) sells.

So Suthep pulls some exaggerated number from is butt and tells his supporters it, then tells them they're hiding that number from them! Throwing in a few mindless catch phrases to sell it as fact.

Should Yingluk have done this program without knowing all these things before hand? Of course she should! Because nobody ever knows these things beforehand. Shes in power, she tries stuff, some works, great!, Some fails, bad!, Some works after fixes, rice pledge likely falls into this category.

Sending poor people a check in the mail is not a good idea, use the money instead to build a rice reserve, its the staple diet of Thailand and floods are making supplies less reliable, so its a better use of the money.

There are no crystal balls in this world (none that are actually accurate). Financial Markets, Businesses and Governments all have access to a vast amount of data and use it to plan for the future.

Investments, planning and purchasing are based on this data.

There is financial trading on rice, even trading on what the next years crop will be worth and the size of the crop (rice outcome or futures trading).

Industry experts help collate the data for rice futures trading.

So there is a indication of what rice would be worth in the future (your crystal ball). Not 100% accurate but accurate enough for millions (even perhaps billions) of dollars worth of investments to be made in.

Know what you are talking about before you comment!

[Baerboxer]

The government has enough money. They just can't access it because the government is in "caretaker" mode due to the elections.

So, basically ..the farmers are not being paid thanks to Suthep.

What makes you believe they have enough money? If they have why didn't they make payments that were due before they dissolved the house? Why wasn't money promised to BAAC ever actually paid over? Why were lies told about G2G contracts that seemingly don't exist?

The farmers aren't been paid because basically the money has disappeared elsewhere, and they didn't get their hands on the 2.2 trillion or 350 billion.

[T_Dog]

Actually not that necessary to borrow money for thai gov. Thailand is a big US treasury bonds holder. More that 50 billions USD on that <deleted>. Uncle Sam might not be happy as well as american taxpayers.

It is a bit curious that they would seek loans when they have cash on hand......

[northernjohn]

Farmers will learn the hard way that you sell your product for what markets pay or you grow something else. This time its hard to feel sorry for them. Those bankers are no bankers if they lend money. It must hurt but it's the only way out. You pay them and they will pledge crop for the next 10 years.

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They did exactly that, sold their rice for the price the market (the government in this case) was offering.

To stop them from growing other things they made up this ridiculous scheme. they just neglected to tell them that there was only so much money in it and their friends were going to be at the head of the line when it comes time to pay. In the mean time go out and borrow money and spend the extra money you would have if we had been honest with you on interest charges.

Oh boy, Suthep will be steaming tonight...

Maybe...but I don't think so. Either way, if they do get the loan, they are risking breaking the election law and they will be disqualified for the election. If they don't get the loan, they are screwed by the farmers. But at the end, when all said and done, they are screwed anyway as investigation into the rice scheme will put some in jail including YS. That is how democracy works.

I thought they had already dismissed charges against Yingluck some thing to do with she didn't know what was happening.

She has a good argument against charges if she uses she doesn't know what is happening as her defense.

[Old Man River]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

While I agree with you on premise, foreign banks have local risk thresholds and expected rates of return. They don't concern themselves with politics, only risk and return. As they are looking at MOF risk and as these are supposed to be short term loans, some may be interested.

Banks that under BOT auspices are required to pay for depositor insurance. Therefore, depositors are insured up to THB 50million per depositor per bank. Union heads have been fearful of their depositors money that are not under the BOT insurance program, which is apparently the case for the BAAC, GHB, GSB, and GPF.

Krung Thai Bank is a large government bank whose depositors are under the BOT insurance . Hence, there should be no issues from the unions about depositor risk, nor about MOF risk since it is owned by the government. Only KTB, as far as I understand, is government owned and their depositors have private depositor insurance. This aside, it will depend on their capital adequacy position, which is public knowledge, but I haven't looked at. If it rates well,the funds may well be available.

Sent from my iPad using Thaivisa Connect Thailand

Foreign banks don't want to get involved with political hot potatoes.

These can easily be blown up by activist groups that stalk AGMs in their home countries. So most avoid anything vaguely political.BAAC, GSB et al are not regulated by BOT. KTB is not wholly owned by government. It is public listed company with many minority shareholders. It has often been subjected to political pressure in the past but directors have same liability to all shareholders as other listed banks. I don't think KTB wants to go back to its dark age of being regarded as a piggy bank for corrupt politicians after so many years hard work improving its corporate governance ratings with local and foreign investors.

Sent from my iPhone using Thaivisa Connect Thailand

KTB is majority government owned. usually, majority rules. Suits by minority shareholders is always a risk, in most countries (including Thailand).

Foreign banks look at risk and return. This never changes. Political risk is but one of the risks they look at.

Sent from my iPad using Thaivisa Connect Thailand

[Old Man River]

Farmers will learn the hard way that you sell your product for what markets pay or you grow something else. This time its hard to feel sorry for them. Those bankers are no bankers if they lend money. It must hurt but it's the only way out. You pay them and they will pledge crop for the next 10 years.

Sent from my GT-I9190 using Thaivisa Connect Thailand mobile app

They did exactly that, sold their rice for the price the market (the government in this case) was offering.

To stop them from growing other things they made up this ridiculous scheme. they just neglected to tell them that there was only so much money in it and their friends were going to be at the head of the line when it comes time to pay. In the mean time go out and borrow money and spend the extra money you would have if we had been honest with you on interest charges.

Oh boy, Suthep will be steaming tonight...

Maybe...but I don't think so. Either way, if they do get the loan, they are risking breaking the election law and they will be disqualified for the election. If they don't get the loan, they are screwed by the farmers. But at the end, when all said and done, they are screwed anyway as investigation into the rice scheme will put some in jail including YS. That is how democracy works.

I thought they had already dismissed charges against Yingluck some thing to do with she didn't know what was happening.

She has a good argument against charges if she uses she doesn't know what is happening as her defense.

NACC is, apparently, going through with impeachment charges. It isn't a criminal case. It is removal from office. Same in other countries.

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[Old Man River]

Now let's see - 33 banks in Thailand. There are 16 Thai commercial and retail banks and 15 foreign banks, most of which have only one branch. That makes 31 commercial and retail banks in Thailand, some of which are tiny or only do very specialized business in the case of most of the foreign banks. That means the two other banks are probably fully state owned banks such as the Government Savings Bank and Bank for Agriculture and Agricultural Cooperatives that have already been approached. There is also the Government Housing Bank and Exim Bank, not to mention the SME Bank that is already techincally insolvent due to fraudulent lending.

All the private sector banks are subject to capital adequacy limits and most are also listed companies, either in Thailand or in their home countries in the case of the foreign branches. If they lend money under a questionable government guarantee that may be voided by a court later, that has implications for their capital adequacy ratios that could cost them money, not to mention the reputable risk of getting involved in the funding of a scheme that is being investigated for fraud.

I would say this is not going to be a slam dunk for Kittirat and I wonder why he would mention 33 banks, knowing the majority are too small to consider it, even if they wanted to, and that foreign banks can't get involved in political stuff like this. Good luck to him.

While I agree with you on premise, foreign banks have local risk thresholds and expected rates of return. They don't concern themselves with politics, only risk and return. As they are looking at MOF risk and as these are supposed to be short term loans, some may be interested.

Banks that under BOT auspices are required to pay for depositor insurance. Therefore, depositors are insured up to THB 50million per depositor per bank. Union heads have been fearful of their depositors money that are not under the BOT insurance program, which is apparently the case for the BAAC, GHB, GSB, and GPF.

Krung Thai Bank is a large government bank whose depositors are under the BOT insurance . Hence, there should be no issues from the unions about depositor risk, nor about MOF risk since it is owned by the government. Only KTB, as far as I understand, is government owned and their depositors have private depositor insurance. This aside, it will depend on their capital adequacy position, which is public knowledge, but I haven't looked at. If it rates well,the funds may well be available.

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Pretty sure BAAC is half owned by Thai Airforce, and the Government owning the other half.

No, BAAC is owned by the Ministry of Finance but the directors still have a duty of care to taxpayers and are liable to criminal prosecution if they violate it's loan regulations. As a state enterprise, it also has a powerful union, unlike commercial banks. The union opposes lending the bank's liquidity to the government which is probably illegal anyway. I would think the union is acting at the board's request to deflect Kittirat's pressure and save them from prosecution.

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The issue appears to be that the BAAC's depositors are not insured up to THB 50 million as it isn't governed by the BOT which requires depositor insurance.

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Edited January 28, 2014 by Old Man River

[belg]

why not loan money from those international bankers?

[Old Man River]

why not loan money from those international bankers?

Why don't the Thai's want to support people from their country?

Same reason. It is about risk.

The farmers need to be paid.

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