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Union threatens BAAC executives

Demands end to lending to rice-pledging scheme using bank liquidity

The Bank for Agriculture and Agricultural Cooperatives' (BAAC) labour union has threatened to seek the ouster of the bank's executives if its board persists in using the bank's liquidity to fund the government's rice-pledging scheme.

Union members wore black to the annual meeting at the BAAC head office yesterday to show their opposition to the government's spending of the bank's money on the rice-pledging scheme.

"If the BAAC's board of directors persists in using the bank's liquidity on this project, the labour union will escalate its opposition into a massive protest in a bid to oust directors and executives who are involved with this matter. One way or another, we will [take some kind of action]. But we will not stop work," said union chairman Prasit Pahom.

Of the bank's Bt180 billion worth of liquidity, it needs to maintain reserves worth Bt60 billion, in line with the Bank of Thailand's capital-adequacy ratio. Another Bt80 billion is reserved for lending to farmers and the remaining Bt40 billion is for deposits.

Moreover, the union reported that the Public Health Ministry said it would withdraw its deposits from the bank if the BAAC continued to allocate its liquidity to the rice-pledging scheme.

The BAAC's board of directors cancelled its meeting scheduled for 2pm yesterday in the face of protests from the union and the anti-government People's Democratic Reform Committee, which rallied outside the bank's head office.

PDRC protesters also targeted the Government Savings Bank (GSB) yesterday. They blockaded the bank and demanded that it not lend money to finance the government's rice-pledging scheme.

Currently, the GSB has surplus liquidity of Bt200 billion. Its president Woravit Chailimpamontri yesterday insisted the bank was not a direct lender to the government for the scheme.

The bank had informed its depositors of the protest situation, and there had been no signs of a rush to withdraw money, he said. Of the total 1,000 GSB branches, only five were affected by the rally protests, and they were only closed temporarily.

The PDRC also warned Krungthai Bank over lending to the government for the scheme.

KTB president Vorapak Tanyawong said in a statement yesterday that the bank provided loans to the BAAC under the same conditions as those applied to general customers.

KTB is widely considered to have been a source of funding for the BAAC in support of past government agricultural-pledging schemes - not only the rice programme. Only 10 per cent of the bank's loan portfolio was lent to the state sector, however.


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