DPA considers other options
One year after commercial banks started contributing 0.47 per cent of their deposits to authorities, the Deposit Protection Agency has seen its deposit fees plummet to Bt800 million-Bt1 billion from Bt30 billion.
Commercial banks had been paying 0.4 per cent of their deposits to the DPA from 2008 until July 31 of last year. Since then they have been paying 0.46 per cent to the Financial Institutions Development Fund and only 0.01 per cent to the DPA.
DPA has accumulated reserves of Bt104 billion, and with commercial banks in Thailand in good shape, there may be no need to speed up mobilisation of deposits.
"We are not worrying about the current deposit fee even though the amount has fallen," Sorasit Soontornkes, president of the DPA, said last week. "The sound status of the DPA depends on the financial strength of the banking industry. The status of banking now is regarded as very secure."
If the banking industry runs into problems and this puts pressure on the DPA, the agency can raise funds via the debt market as regulations allow it to seek funds to support its capital. The office is hiring Tris Rating to do a credit rating.
"The rating will influence the cost of funds. In case the DPA is rated with a ‘good outlook’, that means we will have lower financial costs. Tris Rating will also help provide useful information to ensure the success of fund mobilisation including giving advice about regulations," he said.
