Govt Savings Bank lends Bt5 billion to BAAC


BANGKOK, Feb 17 – The Government Savings Bank (GSB) admitted that it has granted Bt5 billion in loans to the Bank of Agriculture and Agricultural Cooperatives (BAAC) amid opposition by the GSB labour union for fear that the loans would be paid to farmers under the government’s rice pledging scheme.

GSB president Woravit Chailimpamontri said yesterday that the interbank loans to BAAC would be short term for only 30 days and the amount was not as high as the Bt20 billion as widely reported.

He said the borrowing was from GSB’s profit and capital, not from the public’s savings, urging customers to be confident that the loans would not impact the bank’s financial and savings status.

Mr Woravit said the decision to grant loans was made by the Board of Directors last Thursday but negotiations for borrowing started late last year before the anti-government protest was launched.

The GSB chief said the bank’s loans were to add liquidity to the BAAC which had previously borrowed from the bank and paid back loans before the deadline.

He reported normal deposit and withdrawal activities, adding that the GSB’s total deposits are Bt1.87 trillion with Bt2.17 trillion assets and a Bt200 billion liquidity surplus.

Discouraging depositors from withdrawing money from GSB, he said the bank has so far given interbank loans to 35 Thai and foreign banks in Thailand, insisting that there was no shady deal in extending loans to the BAAC.

He said GSB branches in Bangkok with major depositors were told to be prepared for possible massive withdrawals.

The GSB Board of Directors will meet tomorrow to find measures to help people who have borrowed from loan sharks, he said.

Preliminary assistance may involve lending at Bt100,000 to each borrower with a monthly interest at 1 per cent.

The BAAC labour union in the South issued a statement yesterday demanding the management’s clarification about the loans from GSB and threatened to dress in black today to protest against the borrowing.

Meanwhile, Kittiya Todhanakasem, senior executive vice president of state-run Krung Thai Bank, ruled out reports that the bank has granted Bt20 billion in interbank lending to BAAC.