Deposit Protection Agency (DPA) president Songpol Chevapanyaroj made the plea after issuing figures showing deposits shrank 3.61% in the seven months up to August this year.
Songpol said strong deposits were important for individuals’ financial security amid the current economic uncertainty.
The total amount deposited fell despite a 4.45% annual increase in the number of depositors with less than 50,000 baht.
Songpol said the decline was due to rising living costs, which have forced depositors, particularly those on low incomes, to withdraw their savings for daily expenses, resulting in poor financial health.
"Depositors with less than 50,000 baht are a cause of concern because they already have weak financial security. However, as the country's economy improves, average incomes of most people will rise and boost deposited money," he said.
Meanwhile, depositors with 50,000 baht to 1 million baht have decreased in both the number and total amount deposited over the last five years.
Songpol said this high-income group is increasingly investing in assets that provide higher returns than bank interest rates, such as stocks, mutual funds, gold, and real estate.
Institutional deposits have also decreased this year as a result of global economic slowdown, rising war-related pressures, higher energy prices, and tighter monetary policy from central banks, which has a direct impact on consumption and investment.
The DPA chief said Thai spending habits are troubling because the proliferation of borrowing schemes like “buy now, pay later” is fuelling bad spending habits and unnecessary debt creation.
He said the answer was for financial institutions and agencies including the DPA boost financial literacy among the public so they can build wealth without running into debt.
His concern comes as Prime Minister Srettha Thavisin's government prepares to launch a 10,000-baht digital wallet scheme to stimulate spending and revive the economy.
Songpol said it would be better if the government determined precise targets for stimulus that would drive the economy forward and avoid additional debt burdens.
He said the DPA was tightening rules and protocols to boost public trust in protections for depositors.
Total protected deposits shrank by 1.32% to 15.96 trillion baht over the 12 months up to August, according to the DPA.
Protected deposits are expected to fall further this year, consistent with low overall loan growth, before growing next year on the back of improved economic growth.