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 Bank & Finance
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24 Sep 07 09:40
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BoT affirms Deposit Protection Law good for depositors, banks
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TNA
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BANGKOK, Sept 22 - Citing that many countries have already implemented savings protection to depositors, a senior Bank of Thailand (BoT) official said the central bank believes the Deposit Protection Act will benefit depositors and financial institutions alike.
Only a small proportion of depositors -- very large-scale players -- will be denied full coverage under the act. In Thailand only 10,000 depositors have over Bt50 million in a single savings account.
BoT assistant governor Pairote Hengsakul said the Deposit Protection Act set for National Legislative Assembly approval will provide protection of Bt1 million per depositor per financial institution if it is passed and becomes law, covering some 99 per cent of total deposits or about Bt6.5 trillion.
Depositors must decide where to deposit their funds because the full amount will not be protected if the banks collapse, Mr. Pairote said.
There is no need to provent the Act from becoming law because even developing countries like Vietnam and Laos have already implemented such laws, he said.
Full protection of deposits in accordance with a Cabinet resolution in 1997, when Thailand was hit by financial crisis, caused the country to shoulder more than Bt1.4 trillion in responsibility, he said.
Mr. Pairote said he believed full implementation on deposits could be made in 2013.
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