Reform calls for BoT to oversee SFIs
FPO move to improve surveillance process
The Fiscal Policy Office is set to seek Finance Minister Sommai Phasee’s signoff to authorise the Bank of Thailand to take over the supervision and inspection of specialised financial institutions (SFIs).
The move is part of its reform plan to improve surveillance procedures, which will see the Finance Ministry keep its role in setting SFI policy and direction, and appointing executives, said FPO directorgeneral Krisada Chinavicharana.
Executives of SFIs must meet the Bank of Thailand’s criteria, he said.
The central bank’s regulatory standards for SFIs in terms of capital adequacy ratio and loan-loss provision reserves would be looser than for commercial banks because SFIs are required to run businesses that comply with government schemes.
The move was initiated after the military-appointed State Enterprises Policy Commission or superboard allowed the central bank in October to supervise SFIs.
A source at the Finance Ministry said the separation of responsibility for SFIs would make the institutions more transparent.
The Small and Medium Enterprise Development Bank of Thailand (SME Bank), the Government Savings Bank, the GH Bank, the Bank for Agriculture and Agricultural Cooperatives, and the Islamic Bank of Thailand are among the SFIs.
SME Bank president Supot Arevart said it planned to lend 10 billion baht to Otop operators as part of its efforts to stimulate the rural economy and help provinces withstand tumbling farm prices.
The credit facility is one of the National Council for Peace and Order’s policies to help those who live upcountry. To comply with the policy, state enterprises will shift 20-30 billion baht in deposits to SFIs, with 10 billion to the SME Bank to fund the programme.
SME Bank will offer a 1% interest rate for state enterprise deposits and charge Otop operators a 5% rate to borrow, 2% below the industry rate.
Bank chairwoman Salinee Wangtal said its 40-billion-baht new loan target would be reachable this year.
SME Bank prepared assistance measures for clients hurt by the slow economy, she said, such as debt rescheduling, reducing monthly instalments and restructuring loans that turned sour.
Its planned divestment of nonperforming loans (NPLs) to reduce bad loans to below 20 billion baht will become clearer by next month, she said. The bank’s NPLs totalled 31.9 billion baht, accounting for 37.61% of total loans last year.