ASIAN FINANCIAL INSTITUTIONS
TERM PAPER
Overview of Banking System of Thailand
Table of Content
Introduction
Structure of Thai Banking System
1. Central Bank
2. Financial Institutions
2.1 Commercial Banks
2.1.1 Commercial Banks
2.1.2 Retail Banks
2.1.3 Foreign commercial bank’s subsidiary
2.1.4 Foreign commercial bank’s branch
2.2 Finance Companies
2.3 Credit Foncier Companies
3. Specialized financial institutions
3.1 Bank of Agriculture and Agricultural Cooperatives (BAAC)
3.2 Government Housing Bank
3.3 Government Savings Bank (GSB)
3.4 Export Import Bank of Thailand
3.5 Islamic Bank of Thailand
3.6 Small and Medium Enterprise Development Bank of Thailand (SME Bank)
3.7 Thai Credit Guarantee Corporation
3.8 Secondary Mortgage Corporation
4. Regulatory bodies
4.1 MOF
5. Recent situations
Conclusion
Reference list
Appendix
1. appendix
2. reference
Introduction
According to the press release of the Bank of Thailand, the Thai banking system remains resilient with slow pace of loan expansion, sound loan quality, strong net profit and capital position in the third quarter of 2013. There is a net profit of 54.4 billion baht. The banking system is expanding by 19% in the first three quarters of 2012 compared to that in 2011. It experienced temporary setbacks due to the Thai flooding in late 2011. However, most Thai banks remain strong. Net non-performing loans stood at 1.2% of total loans in September 2012. In the third quarter of 2012, capital adequacy ratio and tier-1 ratio of domestic banks are at 15.9% and 11.9& respectively.
Structure of Thai banking system
In Thailand, the banking system is regulated by the Financial Institution Act B.E. 2551 (2008), which sets the definit...
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... worth $2.3 billion to finance a program paying farmers above market price.
Conclusion
To sum up, the banking system of Thailand is robust in third quarter of 2013. The system comprises of the central bank, domestic and foreign commercial banks, finance companies, credit foncier companies and eight specialized financial institutions that are owned by the government and supervised by the Ministry of Finance.
As of December 2012, there are a total of 31 commercial banks, which include 14 domestic commercial banks, 1 retail bank, 15 branches of foreign commercial banks and 1 subsidiary. The recent political turmoil may impose adverse effects on the economy and banking sector of Thailand. Nevertheless, the banking system had remained resilient to cope with instabilities in 2011 caused by the flood in Thailand, earthquake in Japan and European debt crisis.
Globally, banks have been facing big challenges in the last few years and continue to do so. As a result of the financial crisis, the regulators have tightened the minimum capital requirements with the aims to create a more solid and shock-resistant banking system especially for the so called Global Systemically Important Banks (G-SIBs). The Financial Stability Board is expecting to raise the total loss-absorbing capacity
This was followed by securities constituting 20% of total assets while cash is the least with 4% and other assets with 12%. The liability shows that deposit constitute the most material aspect of the total liabilities and equity with 61% followed by borrowings with 28% and shareholders equity with 11%. This shows that the bank is illiquid and invariably insolvent. This is because the bank’s ability to meet demand on deposit and short term liabilities (61%) with available cash (4%) is very
The inflation rate of Thailand was the lowest during 1998. From 1997 to 1998, to solve the Asian financi...
There is a constant flow of cash and funds through the financial system due to the financial institutions as they assist money movement among the borrowers and lenders (lecture notes, chapter 8, 9, 15) a financial institution is basically a firm like a bank which acts as a safe house for depositors to keep their money and also provide loan with interest to others and this how they expand the institution. This is the basic concept of the way the economics works in a country and also how a bank functions. All the banks are connected to one another and if there is a problem in one of the banks the bank looses it image in the minds of the people and if it’s a big problem it can cause disaster within the financial system of the country and this can only be caused due to shortage of liquid cash. To have a proficient system the bank has to be sure to be liquid to avoid any problems. (Chapter 1) To help avoid this problem the government lays down regulations for the banks through prudential supervision (Chapter 2). The Australian regulatory power is Australian Prudential Regulation Authority (APRA), whereas in Singapore it is Monetary Authority of Singapore (MAS). The key concept of their job is to assure the people that their money is in safe hands. Keeping the capital safe is essential as it assists the bank to expand and help them pay off any debts when needed (Chapter 2). In context to if there is an emergency as the government has some control on the banks it asks them to keep some money on the ...
Encouragingly Jordan’s banking sector managed to weather the crisis better than other sector of the economy, and other banking sector in different countries. This was mainly supported by rather conservative policies and tight regulations. For instance banks in this country are pure universal. This implies there is no pure investment bank that relies entirely on investment income, a factor that majo...
It is interesting to note that during the period of 1913 to 1917; almost 87 banks in India succumbed to a financial crisis. However, the Bank of Baroda survived the economic depression by dint of its financial integrity, business prudence and concern uncompromising concern about its customers and clients. This has transcended down to the present ages and has become the motto of the
In this paper, we review the balance sheet provided or XY Bank and cover the differences between a company and a bank’s balance sheet. Additionally we highlight why some of the balance sheet figures are what they are and look at loans and securities and cash levels held at the bank.
Southeast Asia financial crisis started in Thailand currency crisis, and Thailand currency crisis has been brewing as early ...
In the post-colonial context , there is a desire to change the current currency system to improve the management of money and credit ; and to foster a favorable climate for the development of domestic enterprises in which the World Bank proposed the establishment of the National bank of each country . A National bank is seen as a tool of control of financial freedom , which no political independence would not be complete . Therefore, Sir Sydney Caine , former Vice Chancellor of University of Malaya , and Mr. GM Watson , an executive of the Bank of England , has been appointed to carry out a detailed investigation on problems of central banking and to provide advice on the establishment of a center in Malaya , including law rules.
The performances of Current market price of the public sector and private sector banks are analyzed in this section. The Weekly movement of Current market p...
Banking refers to all the services and businesses offered by a bank. A bank is a financial institution that accepts deposits from the public and creates credit. The process of lending and all its activities is managed either directly or indirectly (by use of capital markets). Most banks in most countries are regulated due to their importance in the economic development. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In considering all the other regulations planned to guarantee liquidity, banks are usuallyfocusedon maintaining a minimum capital requirements based on an international set of capital standards, known as
Customers are provided the facility regarding bank assurance by means of modern-day commercial banks. When customers have to deposit certain resources in government places of work or courts because particular purpose, financial institution execute itself as the guarantee for the customer, alternatively on concession of depositing fund by customers.
Banking is a process that is involved in many ways with the business and trade. There are different types of banking in the present world. Two major types are the Conventional Banking and the Islamic Banking. Both of the banking systems are playing very important roles in the trade and business. The focus in this discussion is an evaluation about these two banking system. The chapters will address important bank characteristics that will be included in the regression models. The Ordinary Least Square method will be used to identify how bank characteristics impact bank profitability. The adopted methodology examines the sensitivity of internal bank characteristics on profitability indicators. The profitability study is conducted on Islamic banking system and is compared to conventional banking system. The discussion begins with a literature review and moves on to the critical evaluation and analysis, variable definition, model, and data variables, advantages, disadvantages, points agreed with, points disagreed, reasons, and evidence.
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)
A variety of groups are concerned in bank profitability for various reasons. The bank shareholders would want to know if the value of their investments is high or low. The investors also use current and past performance to predict future price of the banks’ shares traded on the stock exchanged. The management of the bank as trustee of the shareholders is evaluated and compensated on the basis of how well their decisions and planning have contributed to growth in assets and profits of their banks. Employees of bank also are concerned with profits, since their salaries and promotions are frequently tied to the profitability performance of their banks. Depositors use bank performance and profitability as indicators of security for their deposits in the banks. Finally, business community and general public are concerned about their banks’ performance to the extent that their economic prosperity is linked to the success or failure of their banks.