The Government Savings Bank (GSB) has told the Finance Ministry that it would like to continue operating the People's Bank, the revolving Village Fund and the Community Bank micro-finance schemes, despite criticism of such projects.

However, the state-run bank also told the government it would like to end the "Ban Aom Sin" cheap housing-loan programme for low-income earners.

Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula had earlier asked the GSB, along with other specialised financial institutions, to review a number of populist policies initiated by the government of deposed prime minister Thaksin Shinawatra.

Pridiyathorn criticised some of the projects for wasting public resources and posing a risk to fiscal policy.

While the projects have been reviewed by the bank, the Finance Ministry has the final say on which ones will be retained, said GSB director-general Goanpot Asvinvichit.

Woravit Chailimpamontri, deputy director of the GSB, said the bank wanted to continue the People's Bank, the revolving Village Fund and the Community Bank because these projects support low-income groups.

Yet it recommended its housing-loan project be abolished as it had failed to deliver appropriate results.

The bank said it could improve the Individual Debt Restructuring Scheme by providing a training course for participants.

In the Bt30-billion People's Bank project, Bt6.8 billion worth of loans were still outstanding, 14.7 per cent of which were non-performing, said Woravit.

Of the non-performing loans (NPLs), 40 per cent were more than 12 months overdue.

The GSB had issued Bt2.7 billion in loans under the Individual Debt Restructuring Programme, Bt3.2 billion of its own housing loans and Bt1.8 billion in Ua Athorn project housing loans.

Loans for the Asset Capitalisation project amounted to Bt514 million, Bt272 million of which remain outstanding.

Goanpot claimed the GSB could still make a profit of around Bt10 billion this year, even though it would have to meet the reserve required by the Bank of Thailand.

Additional reserve will slightly increase NPLs from the current rate of around 4 per cent, said Goanpot.

Goanpot however refused to talk about current political pressure for some board members to resign, saying only that he had laid a solid foundation for the institution and that the bank could meet its target of mobilising Bt600 billion in savings by the end of the year.

The bank's current savings are worth Bt570 billion.

Wichit Chaitrong

The Nation