Cabinet backs draft law on financial services

Corporate October 11, 2018 01:00


THE CABINET yesterday approved a draft law from the Finance Ministry that governs financial service providers as officials seek to deal with an increasingly diverse landscape for financial services.

This is especially so for those services that have yet to be regulated by the state authorities.

Some of these financial services include the granting of loans that require vehicle registration documents as collateral.

 Under the draft law, an independent committee will be set up to assume this specific task. The law also defines the terms for the providers of loans, and for those providers of financial services that are similar to loans.

A regulator to oversee these financial service providers will be established and chaired by the Finance Ministry's permanent secretary. The Cabinet will also be authorised to consider scrapping the licences of these companies if they fail to comply with the related laws.

According to a Bank of Thailand recommendation on this draft development, the term financial service provider in the draft does not cover the providers of “home for cash” services. There are many such service providers and they have become popular. Therefore, the draft should include this kind of home for cash service into it, the BOT said.

Separately, the Cabinet yesterday approved plan by the Ministry of Social Development and Human Security to start an apartment project under phases 2 to 4 of a plan to replace the old Din Daeng flats, totalling 6,212 units worth Bt10.115 billion.

The Finance Ministry will borrow domestic funds for the project and the National Housing Authority will borrow such funds from the ministry at an interest rate of 2.15 per year. The project is expected to yield a return of investment of 7.53 per cent per year and the break-even period will be reached in 14 years.

The second phase will see the construction of 1,247 apartments at a cost of Bt1.954 billion, with work expected to be completed in 2021. In the third phase, 3,333 apartments will be built at a cost of Bt5.275 billion; construction is expected to be finished in 2022.

The final phase will see the roll-out 1,632 units at a cost of more than Bt2.885 billion, with construction due to finish in 2024.

The first phase of the construction involved the construction of 334 units.