Bankers unhappy with FIDF plan
The Thai Bankers Association is not happy that banks will likely be required to pay a surcharge of up to 1 per cent to tackle the Financial Institutions Development Fund (FIDF) debt, believing it is unfair that commercial banks should have to carry the bu
Association secretary-general Thawatchai Yongkittikul said yesterday that the move is “unfair” on existing commercial banks that survived the 1997 crisis.
The financial houses operating today survived by themselves without requesting any financial help from the government, but the administration seems to want to push the burden onto the banks, he said.
Commercial banks today pay a surcharge of 0.4 per cent of their combined of Bt7 trillion deposits per annum – or Bt28 billion – to the Deposit Protection Agency (DPA).
The government will not touch this amount to tackle the FIDF debt, but the government wants commercial banks to pay an additional 0.6 per cent to cover the FIDF debts, meaning commercial banks will have to pay an additional surcharge of Bt42 billion.
Thawatchai said commercial banks cannot avoid the higher cost and that banks will need to pass the new cost on to account holders. This also impacts on the competitiveness of Thai commercial banks ahead of the upcoming Asean Economic Community (AEC) and financial liberalisation, he added.
The association, however, will wait and see how this issue plays out in the Cabinet today(Tuesday).
When asked whether the government should request that state-owned banks share responsibility for the debt with commercial banks, Thawatchai added that the association has no need to propose any suggestions to the government as this is a policy issue.
