BoT Governor: unusual withdrawal rate at 2 banks unworrisome

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BANGKOK, Feb 26 – The excessive withdrawal of deposits from two specialised state-operated banks–Bt4.8 billion in 20 days–will not affect the country’s financial institutions system, Bank of Thailand (BoT) Governor Prasarn Trairatvorakul said today.

He said the two institutions – the Thai Islamic Bank (IBank) and the Small and Medium Enterprise Development Bank of Thailand (SME Bank) – are wholly owned by the Finance Ministry and their market shares are minimal.

Regarding a call for the BoT to supervise the two banks, Mr Prasarn said the Finance Ministry wants to oversee the six special purpose banks while the BoT merely informs the ministry if it finds unusual or unscrupulous financial activities.

The BoT is willing to supervise the six banks if requested by the Finance Ministry, he said.

In addition to the IBank and SME Bank, the four other specialised banks supervised by the Finance Ministry are the Government Savings Bank, the Government Housing Bank, the Bank of Agriculture and Agricultural Cooperatives and the Export-Import Bank.

The unusual withdrawal of deposits from the IBank and the SME Bank was due to their very high level–Bt24 billion–of non-performing loans.