GSB cancels Bt20 billion interbank loan to BAAC

[Lite Beer]

GSB cancels Bt20 billion interbank loan to BAAC
By Digital Content

BANGKOK, Feb 18 - Thailand's Government Savings Bank (GSB)'s executive board today cancelled a Bt20 billion interbank loan to the Bank of Agriculture and Agricultural Cooperatives (BAAC) and recalled its Bt5 billion loan already granted.

Acting GSB president Worawit Chailimpamontri, who resigned from his post this afternoon amid cheers from the bank staff, said he had no idea the BAAC would ask for loans for the rice pledging scheme.

Mr Worawit, whose resignation will be effective within 30 days, vowed to do all means to bring back customer confidence following recent massive deposit withdrawals at GSB branches particularly in Bangkok, outlying areas and in southern Thailand.

He said an interbank loan is usually for a 30-day period. Mr Worawit asserted his innocence of not knowing the BAAC's purpose of the Bt5-billion loan, for he said the loan documents were indicated to increase the BAAC's liquidity without specifying details.

Judging from the BAAC's stability and its original liquidity, the GSB decided to provide the bank the loan, he said. However, the loan has now been suspended and can be recalled if it is for the wrong purpose, Mr Worawit noted.

Meanwhile, local residents in southern Thailand continued a run on local GSB branches for cash withdrawals.

In Phatthalung province, Bt30 million was reserved following yesterday's withdrawals of Bt20 million, while a local branch in Chumphon provided only Bt2,000 per withdrawal owing to a shortage of cash.

In Songkhla's provincial seat, almost 100 depositors queued up at the bank for withdrawals after the bank was opened for 10 minutes.

Cashier cheques were issued to customers at some GSB branch in the South due to the cash shortage.

On a different note, some enterpreneurs descended on GSB's Bangkok headquarters Tuesday afternoon to open new bank accounts there.

Businesswoman Chanya Sawangjit took a cheque for Bt200 million for a new bank account, saying she was confident in the GSB's financial status and agreed with the bank's previous decision to provide a loan to the BAAC.

Wiwat Theekhakhirikul, chairman of Karmarts Plc, an importer and distributor of cosmetics, facial care and personal care products, also opened a new account of Bt70 million at the bank.

Meanwhile, a meeting of the Pheu Thai Party on Tuesday agreed that its leaders led by former prime minister Somchai Wongsawat and other key figures of the party open new bank accounts at a GSB branch in the capital.

Mr Somchai said the new savings will be to add liquidity to the GSB and to help disgruntled rice farmers. He said such move was to campaign so that the public would put more savings into the bank to compensate the amount withdrawn by other depositors. He said he hoped that the bank's better liquidity could better assist the farmers.

Pheu Thai Party members opened 10 accounts with the bank at the total sum of Bt3 million. During the process, some anti-government protesters whistled to drive out the Pheu Thai members in front of the bank. However, the latter did not pay attention to the demonstrators. (MCOT online news)

-- TNA 2014-02-18

[Basil B]

This bank was set up to encourage Thailand's lower and middle classes to save money in a bank.

A hundred year history destroyed in days by the Shinawatra's and their cronies.

[Sunderland]

Didn't know what the loan was for? I smell 120 billion tonnes of bullsh*t!

[Scamper]

" He said an interbank loan is usually for a 30-day period. Mr Worawit asserted his innocence of not knowing the BAAC's purpose of the Bt5-billion loan, for he said the loan documents were indicated to increase the BAAC's liquidity without specifying details. "

And there's the administration's scam right there. GBS gives a standard 30 day interbank loan for the purposes of boosting BAAC's liquidity - which is the purpose of most interbank loans, which was then to be delegated by BAAC to prop up the rice scheme. That is the scam and it has already cost the job of the president of GBS, and will form the basis of Kittirat's and the administration's impeachment, as Kittirat guaranteed the loan to BAAC - which he is constitutionally forbidden from doing in a caretaker capacity - to be delved out to prop up the rice scheme, an act illegal and unconstitutional by any other means than through parliament.

[winstonc]

all do the hokey cokey... seems a bit late to shut that stable door...its the utter bare faced lying thats so sickening..and there are fools on here who actually believe ..

[Smiles]

" Pheu Thai Party members opened 10 accounts with the bank at the total sum of Bt3 million. "

When will Mr Deep pocket baht arrives from Dubai??

Wonder if the dear PM Ms YL deposit any baht at all !

[Trembly]

This bank was set up to encourage Thailand's lower and middle classes to save money in a bank.

A hundred year history destroyed in days by the Shinawatra's and their cronies.

It was set up at the beginning of the 20th century to be the prototype for a modern banking system in Thailand and in that remit it succeeded very well.

Later on it was also given the mission to encourage people from all walks of life to save.

They even have satellite branches in schools where children are given a student passbook and the administration of the branch is actually done by the students (aged 13 / 14 upwards) under the distant supervision of a teacher. I didn't find out about these student-ran-savings-only branches inside the schools until I taught English a couple of years ago and I was mighty impressed!

[winstonc]

" Pheu Thai Party members opened 10 accounts with the bank at the total sum of Bt3 million. "

When will Mr Deep pocket baht arrives from Dubai??

Wonder if the dear PM Ms YL deposit any baht at all !

she aint that backward........or is she..

[Gulfsailor]

" Pheu Thai Party members opened 10 accounts with the bank at the total sum of Bt3 million. "

When will Mr Deep pocket baht arrives from Dubai??

Wonder if the dear PM Ms YL deposit any baht at all !

1st rule of bank robbers; You don't rob the bank (or country in this case) where you have your account(s).

[TVGerry]

Idiot lost his job because he was stupid enough to put the bank at risk. Today's bank runs goes to show how little faith the people have in this corrupt government to settle their debts and obligations.

[Trembly]

"Acting GSB president Worawit Chailimpamontri, who resigned from his post this afternoon amid cheers from the bank staff, said he had no idea the BAAC would ask for loans for the rice pledging scheme."

The BAAC is facing a shortage in liquidity, which is a major sign of a bank in distress. This triggers concerns from their union as the employees would like to receive their salaries as do the farmers who are demanding the payment for the pledged rice. To keep the system running (i.e. Avoid bankruptcy of the BAAC) the GSB provides a inter-bank loan that is 'secured' by a letter of support by the care-taker government. A letter of support is significantly less of security than an actual guarantee. (The news reports are not clear on whether its a letter of support or an actual guarantee and as long as the actual letter has not been published i assume it is a letter of support as a guarantee issued by a care-taker government would face some legal challenges). That GSB is issuing a THB 20 Billion loan to a bank in distress 'secured' by a letter of comfort is at best daring and i wonder if the lessons learned from the 1996/1997 financial crisis were considered when the credit committee approved the loan.


Sent from my iPad using Thaivisa Connect Thailand

I think such considerations were overshadowed by Mr. Worawit's 'debt of gratitude'.

I did some digging around on the Thai internet and found out some interesting things about Worawit. (spoiler : he's sat on enough gravy trains to last several lifetimes).

After having worked in finance for only 2 years, Worawit became an economic advisor to the Energy Commission in 1997, aged 28.

He obviously deepened his already deep connections with members of parliament because in that same year he also became a member of an important Minister-appointed committee overseeing the privatisation of bus routes for the publicly owned Transport Company (monopolistic operator of all Thai bus stations with their own buses and bus routes).

2003 was a bumper year for him; he was made advisor to the Deputy Minister of Finance as well as the becoming the Chairman of the Law and Debt Collection committee for the Dairy Promotion Organization. Later in the year aged 34, he becomes a fully fledged board member of GSB (!!!).

I won't bother to name them all but suffice it to say that this man has been passed around like a relay baton by the relevant PTP ministers since his mid-twenties.

There was even a scandal when his name was put down for the job of director of the Government Housing Bank; the employees got wind that 20 million baht had changed hands to rig the selection process in his favour against many more senior and more qualified candidates (which involved a great deal of PTP infighting resulting in a few quiet resignations) and there was even a ballot for industrial action by the union which explicitly cited the 20 million baht bribe as the reason, but apparently that fizzled out when he didn't get the job.

So . . .who's your boy?

[Trembly]

Idiot lost his job because he was stupid enough to put the bank at risk. Today's bank runs goes to show how little faith the people have in this corrupt government to settle their debts and obligations.

Aye, his 650,000 Baht a month job. It would be interesting to note his professional trajectory from this point onwards.

[Bkkbound]

all do the hokey cokey... seems a bit late to shut that stable door...its the utter bare faced lying thats so sickening..and there are fools on here who actually believe ..

There have been many fools who bought into The Shins corrupt ways, including his first election victory, when he transferred assets to his driver and maid, the man has done a lot of damage to the country

[JesseFrank]

Meanwhile, a meeting of the Pheu Thai Party on Tuesday agreed that its leaders led by former prime minister Somchai Wongsawat and other key figures of the party open new bank accounts at a GSB branch in the capital.

That is not too bad, at least the NACC doesn't have to run around to pursue where the stolen money is deposited.

[ChrisY1]

Didn't know what the loan was for? I smell 120 billion tonnes of bullsh*t!

Yes....these guys are always attempting to squirm their way out of an admission......I've never heard an executive of any company or government here in Thailand admit to making a cock-up....always someone else gets the blame....!

Thankfully he resigned....but my bet is that he's still there after the 30 days!

[casualbiker]

Idiot lost his job because he was stupid enough to put the bank at risk. Today's bank runs goes to show how little faith the people have in this corrupt government to settle their debts and obligations.

Aye, his 650,000 Baht a month job. It would be interesting to note his professional trajectory from this point onwards.

He probably just goes back to his original job before "acting " whatever!

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

[djjamie]

The fiasco at GSB is because of the government's lack of transparency and accountability. Before the BAAC committed to anything, the government should have first explained;

1. What the BAAC's situation is regarding liquidity? Is it so bad that it needed to cash injection from GSB?

2. In Sept 2013 the cabinet set a ceiling for loans for the rice scheme at 500 billion baht, with no more than 90 billion baht coming from BAAC. Has this ceiling been reached? If so, how can the PTP borrow more money?

3. The PTP should repay 90 billion baht back to BAAC, and if it has already done so then there is no need to borrow more money.

4. If BAAC is to repay the farmer's loans on behalf of the PTP, the loan must be officially guaranteed by the PTP. Was GSB's inter-bank loan guaranteed by the PTP?

5. If BAAC did not intend to use the loan to repay the farmers' debt then what was the loan for?

These questions should have been answered to assure the public that the transaction was transparent and lawful, beyond that there is also the issue of whether such actions by a caretaker govt is constitutional.

This is not conducive to a "not guilty" verdict by the NACC. The PTP really are their own worst enemy and if anything the DEMS have prolonged the PTP's political life by holding them accountable. Had the DEM's not been on the political landscape the PTP would have dug their own hole 18 months ago as there was no "father figure" standing over them shaking their finger disapprovingly.

The PTP. The nasty brat kid brother with no discipline.

Edited February 18, 2014 by djjamie

[Why ask]

Oh Dear! Again..

PTP's finest hour is arriving soon. Gonna be a lot of angry rice farmers....

[ETatBKK]

There have been many fools who bought into The Shins corrupt ways, including his first election victory, when he transferred assets to his driver and maid, the man has done a lot of damage to the country

a Thai friend wrote to me this afternoon :

we are bearing the consequences of electing bad guys to govern the country. I hope the Thais learned some lessons after this otherwise we'll have nothing left.

yeah, very emotional and from deep inside.

[thaipod]

Been told that Worawit is close to Taksin's sister in the north and supported by Taksin who is a very large share holder of this bank , of course he knew what he was doing to be holding a position of president of the bank and knew also it was for the rice scheme.

He should be sacked on the spot

[pookiki]

A fairly good article in the BP on this issue. It's worth reading and provides another side of the coin to the posts here.

[scorecard]

'..... and recalled its Bt5 billion loan already granted. .....'

From other reports the BAAC, the bank which received the 5m, this money has already been distributed to farmers.

So now the questions:

- What prompted the GSB to give BAAC the 5m? A good guess would be political interference. Another case for the NACC to investigate.

- Does the BAAC have the funds to return the 5m to the GSB?

- If no, then what happens next. GSB demands the return of their funds. Maybe loan shark thugs on the job - at the least more tangled web for the NACC to investigate.

- If yes, then why didn't they distribute it to the farmers before this all happened? Perhaps even more stuff for the NACC to investigate.

[TallGuyJohninBKK]

It's terrible for Thailand and the bank and the unpaid farmers.

But it's great to see the people of Thailand, even if only for their financial self interest, foil the latest plan of the inveterate crooks and schemers.

Hopefully, this nasty nightmare will come to some end soon.

[thesetat2013]

" Pheu Thai Party members opened 10 accounts with the bank at the total sum of Bt3 million. "

When will Mr Deep pocket baht arrives from Dubai??

Wonder if the dear PM Ms YL deposit any baht at all !

1st rule of bank robbers; You don't rob the bank (or country in this case) where you have your account(s).

That is a western rule. East rule says rob everyone you can and blame on someone else.

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

[Robby nz]

'..... and recalled its Bt5 billion loan already granted. .....'

From other reports the BAAC, the bank which received the 5m, this money has already been distributed to farmers.

So now the questions:

- What prompted the GSB to give BAAC the 5m? A good guess would be political interference. Another case for the NACC to investigate.

- Does the BAAC have the funds to return the 5m to the GSB?

- If no, then what happens next. GSB demands the return of their funds. Maybe loan shark thugs on the job - at the least more tangled web for the NACC to investigate.

- If yes, then why didn't they distribute it to the farmers before this all happened? Perhaps even more stuff for the NACC to investigate.

- Does the BAAC have the funds to return the 5m to the GSB?

As the money was supposed to (officially) go to shore up the BAAC liquidity repayment should in theory come from the BAAC liquidity.

However if they have already spent it, paid it out to farmers, then the 5 billion should still come from the liquidity (where it was supposed to have gone) which would them drop the BAAC liquidity by 5 billion.

What a cock up.

[marcusd]

The fiasco at GSB is because of the government's lack of transparency and accountability. Before the BAAC committed to anything, the government should have first explained;

1. What the BAAC's situation is regarding liquidity? Is it so bad that it needed to cash injection from GSB?

2. In Sept 2013 the cabinet set a ceiling for loans for the rice scheme at 500 billion baht, with no more than 90 billion baht coming from BAAC. Has this ceiling been reached? If so, how can the PTP borrow more money?

3. The PTP should repay 90 billion baht back to BAAC, and if it has already done so then there is no need to borrow more money.

4. If BAAC is to repay the farmer's loans on behalf of the PTP, the loan must be officially guaranteed by the PTP. Was GSB's inter-bank loan guaranteed by the PTP?

5. If BAAC did not intend to use the loan to repay the farmers' debt then what was the loan for?

These questions should have been answered to assure the public that the transaction was transparent and lawful, beyond that there is also the issue of whether such actions by a caretaker govt is constitutional.

This is not conducive to a "not guilty" verdict by the NACC. The PTP really are their own worst enemy and if anything the DEMS have prolonged the PTP's political life by holding them accountable. Had the DEM's not been on the political landscape the PTP would have dug their own hole 18 months ago as there was no "father figure" standing over them shaking their finger disapprovingly.

The PTP. The nasty brat kid brother with no discipline.

this is Thailand. No explanation needed

Marcusd. Via tapatalk

[LuckyLew]

Idiot lost his job because he was stupid enough to put the bank at risk. Today's bank runs goes to show how little faith the people have in this corrupt government to settle their debts and obligations.

Aye, his 650,000 Baht a month job. It would be interesting to note his professional trajectory from this point onwards.

He will be number two on next PTP party list

[love1012]

THE REAL THai people have spoken

[love1012]

A fairly good article in the BP on this issue. It's worth reading and provides another side of the coin to the posts here.

Maybe you could learn two look at 2 sides and transfer that thinking to your own posts?

[Gulfsailor]

Been told that Worawit is close to Taksin's sister in the north and supported by Taksin who is a very large share holder of this bank , of course he knew what he was doing to be holding a position of president of the bank and knew also it was for the rice scheme.

He should be sacked on the spot

Ok. Making ridiculous statements doesn't help your cause. The Government Saving Bank is a state bank. It doesn't have any private shareholders. Unless you try to convey that Thaksin sees all state assets as his own, in which case he would own 100% of said bank.