BAAC union queries lending ability
Digital wallet scheme funding probed
The labour union of the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) has called on relevant agencies to help interpret the BAAC’s laws regarding whether the government can utilise the bank to support its controversial 10,000-baht digital wallet scheme.
Supachai Vongvekin, president of the BAAC’s labour union, said among union members there is a divide. Some people suggest the government can borrow money from the bank, citing the BAAC Act of 1966 and amendment Section 9(3), which allows such activity.
Section 9(3) indicates the BAAC operates as a financial institution for rural development, providing financial assistance or management to individuals, groups, entrepreneurs, village or community funds, or organisations established to support the livelihoods of farmers or communities to enhance productivity or products, investment, production, processing, marketing, or community economic development.
However, Mr Supachai said other union members interpret Section 9(3) as an expansion of the BAAC’s lending scope to farmers outside agriculture, increasing their income apart from original agricultural purposes.
This group regards the amendment as pertaining to the BAAC’s provision of loans to farmers.
Whether the government can borrow money from the Government Savings Bank (GSB) to provide to farmers and whether this is considered lending to farmers are questions arising from this provision, he said.
In the past, governments have used Section 28 of the State Fiscal and Financial Discipline Act to order the BAAC to allocate money in advance to support state-sponsored projects, such as the rice-pledging scheme.
However, in those instances the GSB directly transferred money to farmers’ accounts. In this case, it is uncertain which method the government will
To ensure legal compliance, relevant agencies such as the Bank of Thailand, Finance Ministry and Council of State should help interpret whether the BAAC’s laws align with the government’s intended policies. SUPACHAI VONGVEKIN President, BAAC labour union
employ, Mr Supachai said.
“To ensure legal compliance, relevant agencies such as the Bank of Thailand, Finance Ministry and Council of State should help interpret whether the BAAC’s laws align with the government’s intended policies,” he said.
Deputy Finance Minister Julapun Amornvivat said earlier the scheme’s funding would be obtained from three sources: 153 billion baht from the fiscal 2025 budget; 175 billion from budget reallocation for the current fiscal year; and 172 billion via a loan from the BAAC.
According to a source who requested anonymity, although the BAAC’s liquidity totals roughly 200 billion baht, exceeding the amount the government plans to borrow for the digital wallet project, a portion of this amount must be kept as a reserve, in line with Bank of Thailand policy.
The proposal to borrow 172 billion baht from the BAAC requires prior approval from the cabinet, then presentation to the GSB’s board for further consideration, the source said.