Chapter 3
Supervision of Financial Institutions

Division 1
Maintenance of Capital Funds and Assets

Section 29 A financial institution shall maintain its capital fund in accordance with the rule as prescribed in the notification of the Bank of Thailand.

The Bank of Thailand shall have the power to prescribe type and category of the capital funds as well as rule for the calculation of the capital funds of a financial
institution.

Section 30 A financial institution shall maintain its capital fund in proportion to its assets, liabilities, contingent liabilities or variables and any other risks in accordance with the rule as prescribed in the notification of the Bank of Thailand.

The stipulation under the first paragraph may be issued for financial institutions in general to maintain their capital funds in proportion to their assets, liabilities, contingent liabilities or variables and any other risks in accordance with the size or type of assets, liabilities, contingent liabilities or variables and any other risk in aggregate of all types or for each type. In the case where it becomes apparent that any financial institution has high risk exposure, the Bank of Thailand may order such financial institution to undertake any relevant action as deemed appropriate.

Section 31 A financial institution shall disclose the information related to the capital fund maintenance and information related to the risk exposure of the financial institution or its financial business group in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Section 32 A foreign commercial banks’ branch licensed to undertake the business as prescribed in this Act shall maintain assets in Thailand or hold securities in foreign countries in accordance with the rule as prescribed in the notification of the Bank of Thailand. The said assets and securities shall be considered as a capital fund under this Act.

Assets or securities under the first paragraph shall consist of:
(1) the money brought in from the head office or any other branches outside Thailand of such foreign financial institution;
(2) various reserves, excluding reserves for diminution of the values of assets and reserves for repayment of debts; or
(3) net profits of the branch in respect of each accounting period after deduction of all accumulated losses incurred in the previous accounting periods and including profits which have been transferred to the account of the head office but have not been remitted outside the Kingdom.

Division 2
Investment of Financial Institutions

Section 33 Subject to Section 34 and Section 35, a financial institution may invest in securities for its ownership in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Section 34 No financial institution shall hold or possess, either directly or indirectly, shares of any companies in excess of the following ratios in accordance with the rule as prescribed in the notification of the Bank of Thailand:

(1) twenty percent of the total capital funds of such financial institution for holding or possessing of shares of all companies;
(2) five percent of the total capital funds of such financial institution for holding or possessing of shares of each company; or
(3) ten percent of the total shares sold of such company.

In the case where it is necessary, the Bank of Thailand shall have power to prescribe the maximum ratio of holding or possessing shares to be lower than the prescribed percentages under the first paragraph. Such stipulation shall be notified at least fifteen days in advance of the effective date.

In the case where it is necessary for a financial institution to hold or possess shares of any company as a result of debt restructuring, debt repayment, enforcement of debt, receipt of security for granting of credits or for the undertaking business of their supporting business, the Bank of Thailand shall have the power to grant permission to hold or possess shares exceeding the ratios stipulated under the first paragraph. Such permission may be granted with rules.

Shares held by any related person of a financial institution shall be included as shares held or possessed by such financial institution in accordance with this Act.

The provision of this Section shall not apply to the third paragraph of Section 58.

Section 35 No financial institution shall hold or possess the following securities:

(1) shares or securities related to shares of other financial institutions undertaking the same type of business except those acquired as a result of a debt settlement or a guarantee in respect of credit granted which shall be disposed within six months from the date of acquisition, or those purchased or acquired with the permission of the Bank of Thailand. Such permission may be granted with rules;
(2) securities related to shares of such financial institution in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Division 3
Business Undertaking

Section 36 A commercial bank, a finance company and a credit foncier company shall undertake the business specified to commercial banking business, finance business or credit foncier business ,as the case may be, and business connected to or necessary to undertake the business of commercial bank, finance business or credit foncier business under the rule as prescribed in the notification of the Bank of Thailand. In this regard, the Bank of Thailand may issue notification prescribing connected or necessary businesses segregated by the types of financial institutions and categories of commercial banks, and may prescribe rule for undertaking such connected or necessary business.

Section 37 A financial institution shall open for business at its office, at least, on the date and time as prescribed in the notification of the Bank of Thailand except as permitted otherwise by the Bank of Thailand . Such permission may be granted with any rule to be complied with.

A financial institution shall have traditional holidays in each year as prescribed in the notification of the Bank of Thailand.

A financial institution shall announce date and time opening and closing for business in a public area at the office of such financial institution.

Section 38 A financial institution shall announce information concerning interest rates, discount rates and any service charges whether known under different names, as well as any other information related to such financial institution in a public area at the office of the financial institution in order to make the public and customers contacting or using services in such office aware of such information.

Such financial institution shall report with a copy of the notices or such information to the Bank of Thailand in accordance with the rule as prescribed in the notification of the Bank of Thailand.

The financial institution shall announce information under the first paragraph in any media in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Section 39 For the purpose of consumer protection, the Bank of Thailand shall have power to prescribe the following matters in the notification for one or several types of financial institutions to comply with:

(1) accepting deposits of money, accepting money from the public, borrowing money, making investments, granting of credits, incurring contingent liabilities, and undertaking other businesses that such financial institutions may carry on;
(2) executing juristic acts or contracts with the public, consumers or retail customers in the course of the undertaking of business of financial institutions, which have amount or values as prescribed by the Bank of Thailand whether in content, calculation methods or contract forms;
(3) executing guarantee contracts which shall specify the principal amount limits or shall not have unlimited guarantee by the guarantor.
In the case of guarantee of debt which having a specified due date and financial
institutions have agreed to extend such due date to the primary debtor but is unable to settle within six months, the financial institutions shall notify the guarantor for acknowledgement;
(4) requirements where juristic acts or contracts grant the sole right to financial institutions to amend the contract;
(5) Disclosure of information related to financial institutions.

Section 40 A Financial institution shall notify and demonstrate methods as well as details of the calculation of annual rate of service charges to the public and customers applying for credits.

Annual rate of service charges under the first paragraph consists of all expenses the financial institution charges per annum from the public and customer in granting of credits including interests, discounts and service charges.
The Bank of Thailand shall have power to prescribe in the notification the methods to calculate annual rate of service charges to be complied with by financial institutions.

Next Page

[1]  [2]  [3]  [4]  [5]  [6]  [7]  [8]  [9]  [10]  [11]  [12]  [13]