Commercial banks plan to discuss the competition between them and the specialised financial institutions after four state-owned banks failed to pay the fee of 0.46 per cent of deposits to the Financial Institutions Development Fund.
“We will talk about the matter at the meeting of the Thai Bankers Association to find a solution,” Praphan Anupongongarch, executive vice president of Thanachart Bank, said yesterday.
The Constitution Court has ruled in favour of two executive decrees allowing the government to borrow Bt350 billion and to transfer the debt of the FDIF by collecting 0.46 per cent of deposits from all commercial banks and four state-owned banks.
The four are the Government Savings Bank, Government Housing Bank, Bank for Agriculture and Agricultural Cooperatives and Islamic Bank of Thailand.
The commercial banks paid the fee already in July but the state-owned banks have not paid because of unclear enforcement, said Somchai Sajjapongse, director-general of the Fiscal Policy Office (FPO).
Praphan said the commercial banks wanted to see equal standards and fair play in the banking industry.
Commercial banks might consider adjusting their strategies to improve their competitiveness while carrying a higher cost than state-owned banks, he said.
Somchai said that if the state-run banks reserved the amount of surcharges, they would lose business opportunities.
However, the FPO will try to control the lending of state-owned banks. They should not compete with commercial banks in giving loans, especially to corporate customers, he said.
The decree is under the Council of State’s consideration. However, the Council of State has suggested to the FPO that the surcharge of 0.46 per cent should not cover all state-owned banks, just the four banks.
When the decree is finalised, the FPO will propose it to the finance minister before submitting it to the Cabinet for approval and Parliament for enactment. The four state-run banks would face a cost burden of Bt15 billion per year from paying the 0.46-per-cent premium.
The four banks have told the Finance Ministry that the surcharge of 0.46 per cent of deposits would increase their costs and affect the overall money market.
Tachaphol Kanjanakul, acting president of the Government Savings Bank, said it had called on the FPO to suspend the fee collection because it would have an impact on its costs.
If the GSB, which has a state loan proportion of 25 per cent, has to pay 0.46 per cent of its deposits, it would have to raise its interest rates if it makes a bid to finance state projects.
The GSB might consider cutting back on government bonds, which now make up 15 per cent of its investment portfolio, because the bank has to maintain sufficient cash reserves. This would reduce the liquidity of the repurchase market.
Based on its current deposit base, the GSB would have to pay fees of Bt7 billion per year to the FIDF.