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RICE-PLEDGING

Explanation needed to tackle withdrawals: TBA

GSB president and chief executive Worawit Chailimpamontri at the press conference.

GSB president and chief executive Worawit Chailimpamontri at the press conference.

The Thai Bankers Association urged the government to urgently tackle public confusion, which led to massive deposit withdrawals at the Government Savings Bank.

Caretaker Deputy Prime Minister Kittiratt Na-Ranong told the Channel 3 evening news programme that GSB’s liquidity remained stable despite the massive withdrawals. He insisted that the interbank lending is a normal transaction.

Twatchai Yongkittikul, secretary general of the Thai Bankers Association, expressed concerns on the massive withdrawals. Urging the government to clarify this issue, he attributed that to confusion and public misunderstanding.

He noted that GSB’s interbank loan to BAAC could lead to legal problems if the latter directly hands the money to farmers. However, there would be no legal issue if BAAC lends the money to private companies joining the rice bidding and allow the government to repay farmers with the proceeds from the stockpile release.Government Savings Bank on Monday faced net deposit withdrawals worth Bt20 billion.

GSB president and chief executive Worawit Chailimpamontri announced that said at a press conference that clients have withdrawn Bt30 billion following the bank’s planned lending to the rice-pledging scheme.

On the same day, the bank received new deposits worth Bt10 billion.

GSB plans to lend Bt20 billion to the Bank for Agriculture and Agricultural Cooperatives, which is tasked to repay farmers joining the pledging scheme. It has already extended Bt5 billion to BAAC.

As of 2012, GSB sat on Bt1.68 trillion of deposits, against Bt1.8 trillion in net lending.


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