FRIDAY, March 29, 2024
nationthailand

FIDF to resume original role

FIDF to resume original role

The Cabinet on Friday approved a draft amendment to Bank of Thailand Act, to reinstate the original power of the Financial Institutions Development Fund (FIDF).

 

Under the draft, the FIDF will act as the last resort of financial institutions, said 
government deputy spokesman Pakdiharn Himathongkham. 
It will be allowed to extend collateralised or clean loans to financial institutions accordingly to conditions approved by the finance minister, to buy and hold shares in financial institutions, and to provide a window for bond or loan claim repurchases. 
The Finance Ministry, which proposed the bill, said that since the Deposit Protection Agency was set up in 2008 and the FIDF's role was abolished, there has been no law or new agency tasked to extend financial help to financially-ailing institutions. It resolved that the FIDF should resume the role, given its experience and adequate resources. The central bank is authorised to adjust the resources for the fund as it sees fit.
Under the bill, once any financial institution shows a symptom which might lead to a systemic risk, the Bank of Thailand's Financial Institutions Policy Committee can ask for the FIDF's financial help. It is obliged to draw a plan and convince the fund's board of directors that the plan would benefit the financial system. Once approved, the plan still needs endorsement from the Cabinet. 
nationthailand