Banks' plea over shares
Due to tough economic conditions, commercial banks have asked the Bank of Thailand (BOT) to delay the deadline for selling shares of debtor companies that they derived from debt restructuring.
Prasarn Trairatvorakul, president of Kasikornbank, said the Thai Bankers Association would propose details on the rule relaxation following a discussion between the banks' representatives and the BOT last week. Banks had received a letter from the BOT saying that the deadline would not be extended. Banks have to decrease shareholdings in non-core businesses to 10 per cent or lower within certain times. "Under the current economic slowdown, it's quite hard for banks to comply with the BOT's requirements. No bank wants to have a stake in non-core businesses. But they have to do that as they have no choice," Prasarn said. In the wake of the 1997 financial crisis, debt restructuring mostly led to the practice of debt-to-equity swaps, which are generally disliked by customers. To sell shares in non-core businesses would depend upon the economic environment as well as the liquidity in the share trading of each company, Prasarn said. Somruedi Banchingduang, The Nation
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