Banking Sector of Thailand
Country: Thailand
Country Overview
Overview of the Thai Banking Industry
To begin with, the overall structure of the Thai financial sector is mainly consisted of the Bank of Thailand (BOT), governed by the Ministry of Finance, whose duties are to maintain financial stability of the economic system and to supervise financial institutions – commercial banks, finance companies, credit foncier companies, and non-bank such as credit card and other non-collateralized loan activities. Other key regulators within the Thai financial realm are the Securities and Exchange Commission, the Ministry of Finance, The Office of Insurance Commission, and the Ministry of Agriculture and Cooperatives. However, the scope of this report would only include the banking sector.
History and Past Legislation of the Thai Banking Industry
The Thai banking industry went through a financial liberalization in the early 1990s by accepting the International Monetary Fund’s Articles of Agreement along with deregulating measures in the financial system. In order to correspond with the worldwide financial trend and to support the rapid growth of the Thai economy, in 1993, the Thai government has established the Bangkok International Banking Facility (BIBF) to facilitate the flow of foreign capital into Thailand.
However, the Asian financial crisis in 1997 caused a deep impact on the Thai financial system as foreign investors had withdrawn their investments out of Thailand, which resulted in the devaluation of the Thai Baht and the sharp increase in the non-performing loans (NPLs) in the banking industry caused by the convenient access to capital both overseas (foreign currency nominated debt) and domestic (Thai Baht nominated debt). Consequently, the BOT has been taking cautious steps in terms of controlling the movement of capital in and out of the country, and setting monetary policies.
Several years after the Asian financial turmoil that took place in 1997, the Thai banking
Country Overview
Overview of the Thai Banking Industry
To begin with, the overall structure of the Thai financial sector is mainly consisted of the Bank of Thailand (BOT), governed by the Ministry of Finance, whose duties are to maintain financial stability of the economic system and to supervise financial institutions – commercial banks, finance companies, credit foncier companies, and non-bank such as credit card and other non-collateralized loan activities. Other key regulators within the Thai financial realm are the Securities and Exchange Commission, the Ministry of Finance, The Office of Insurance Commission, and the Ministry of Agriculture and Cooperatives. However, the scope of this report would only include the banking sector.
History and Past Legislation of the Thai Banking Industry
The Thai banking industry went through a financial liberalization in the early 1990s by accepting the International Monetary Fund’s Articles of Agreement along with deregulating measures in the financial system. In order to correspond with the worldwide financial trend and to support the rapid growth of the Thai economy, in 1993, the Thai government has established the Bangkok International Banking Facility (BIBF) to facilitate the flow of foreign capital into Thailand.
However, the Asian financial crisis in 1997 caused a deep impact on the Thai financial system as foreign investors had withdrawn their investments out of Thailand, which resulted in the devaluation of the Thai Baht and the sharp increase in the non-performing loans (NPLs) in the banking industry caused by the convenient access to capital both overseas (foreign currency nominated debt) and domestic (Thai Baht nominated debt). Consequently, the BOT has been taking cautious steps in terms of controlling the movement of capital in and out of the country, and setting monetary policies.
Several years after the Asian financial turmoil that took place in 1997, the Thai banking