FPO to tighten rules for savings co-ops, supports control by Finance Ministry
August 09, 2014 01:00 By Suphannee Pootpisut The Natio 2,050 Viewed
The Fiscal Policy Office will issue regulations to reduce risks related to savings cooperatives, while agreeing to a proposal to put these organisations under Finance Ministry supervision, instead of under the Agriculture and Cooperatives Ministry as is t
“I agreed with the proposed transfer of savings cooperatives across the country to Finance Ministry supervision as we have certain risk-management measures for business operations,” FPO director-general Krisada Chinavicharana said. The proposal came after Klongchan Credit Union Cooperative was caught up in a Bt12-billion money-laundering scandal.
Given the fact that some savings cooperatives have many members and are large organisations, they are required to be subject to standardised supervision, and to face penalties for non-compliance or malfeasance.
“The FPO will propose that provincial offices of the Comptroller General’s Department supervise savings cooperatives. These offices have accounting and financial knowledge. We just have to set regulations for their inspection,” Krisada said.
He said savings cooperatives should accept deposits and loan applications from their members only. Other activities such as extending loans to other savings cooperatives would require permission from the supervisory unit.
As of January 1, there were 8,161 cooperatives, 7,225 of which were active. Of the total, 1,487 were savings cooperatives with 2.7 million members, and 518 credit-union cooperatives with 1 million members. As of 2013, savings cooperatives had deposits of Bt485 billion and outstanding loans of Bt1.12 trillion. Credit-union cooperatives had deposits of Bt25.5 billion and loans of Bt23.2 billion.