Section 41 In the undertaking of business related to accepting deposits of money, accepting money from the public, granting of credits, borrowing of money, investing, incurring contingent liabilities or buying and selling of bills of exchange or any other negotiable instrument, or buying and selling of foreign exchange, a financial institution shall comply with the rule as prescribed in the notification of the Bank of Thailand.

The stipulation under the first paragraph may be in accordance with the type of deposits or borrowings, type of persons, type of deposit or borrowing documents, or type of instruments.

Where it is necessary for the stability of a financial institution and for the examination of the financial institution examiner, the Bank of Thailand shall have power to prescribe for the financial institution to comply with the following matters:
(1) executing juristic acts related to the undertaking of financial institution businesses;
(2) examining and internal control of the financial institution;
(3) management and administration of the financial institution.

Section 42 For the purpose of rectification of economic conditions, the Bank of Thailand shall have power to prescribe in the notification on the following matters:

(1) stipulating of the limits of credits, transactions similar to credits, acceptance or giving an aval to bills granted by financial institutions for one or several types of business. Such stipulation may be made in proportion to total amount of lending, transactions similar to credits granting, acceptance or giving an aval to bills granted by financial institutions or in proportion to the capital fund of the financial institutions or in proportion to total amount of money accepting or borrowing from the public by the financial institutions at any particular time;
(2) prohibiting financial institutions to increase the amount of credits or transactions similar to credits granting to any type of business, or to grant credits or transactions similar to credits to any type of business higher than prescribed ratio. The stipulation may be made in proportion to the total amount of credits or transactions similar to credits granted by the financial institution to each business at any particular time.

Section 43 A financial institution shall obtain prior approval from the Bank of

Thailand for the following activities:
(1) sell or transfer whole or important parts of business of the financial institution to other persons according to the resolution of a shareholder meeting by a vote of not less than three quarters of the total number of shareholders attending the
meeting and entitled to vote;
(2) purchase or acquire whole or important parts of businesses of other companies according to the resolution of a shareholder meeting by a vote of not less than three quarters of the total number of shareholders attending the meeting and
entitled to vote;
(3) enter into a contract, allow or assign other persons who are not directors, managers or officers of the financial institution with the absolute or part of power of management of the financial institution, or merge the business with other persons with an objective towards profit and loss sharing.
The approval under the first paragraph may be granted with any rule to be complied with by the financial institution and the Bank of Thailand shall notify such approval to the Minister without delay.

Section 44 Financial institutions except for credit foncier companies may accept deposits of money subject to withdrawal at the end of a specified period by issuing a certificate of deposit.

The certificate of deposit shall contain the following particulars: (1) the designation of it as a certificate of deposit;
(2) the name of financial institution which issues the certificate of deposit; (3) the province where the issuer of the certificate of deposit is located;
(4) the date on which the certificate of deposit is issued;
(5) an unconditional agreement to pay a sum certain in money including interests (if any);
(6) maturity date;
(7) the place of payment;
(8) the name of depositor or a mention that it is payable to bearer;
(9) the signature of the person authorized to sign on behalf of the financial institution which issues the certificate of deposit.

Section 45 The provisions of the Civil and Commercial Code Section 764 to Section 766, Section 899 to Section 907, Section 911, Section 913 (1) and (2), Section 914 to Section 916, the first and third paragraph of Section 917, Section 918 to Section 922, Section 925, Section 926, Section 938 to Section 942, Section 945, Section 946, Section 948, Section 949, Section 959, Section 967, Section 971, Section 973, Section 986, Section 994 to Section 1000, Section 1006 to Section 1008, Section 1010 and Section 1011 shall apply to certificate of deposit mutatis mutandis.

Section 46 Where it is deemed appropriate, the Bank of Thailand may prescribe the following matters in the notification for a financial institution to comply with:
(1) interests or discounts chargeable; (2) interests or discounts payable;
(3) service charges that may be demanded; (4) earnests that may be demanded;
(5) securities in the form of property that shall be demanded;
(6) benefits that may be demanded from transactions similar to credits granting;
(7) penalties that may be demanded.

Any and all the monies, properties or other things whose values can be assessed in terms of money, which any depositor or other person receives from a financial institution, officer or employee of a financial institution, by reason of money deposits , borrowing money or receiving money, or which a financial institution, an officer or an employee of a financial institution receives by reason of the carrying on such business of the financial institution, shall be regarded as interests, discounts or service charges, as the case may be, provided that the service charges prescribed by the Bank of Thailand under (3) shall not be regarded as interests or discounts chargeable by the financial institution under (1).

The stipulation under the first paragraph may be provided in accordance with type of business, borrowing, accepting of money from the public, or other activities that financial institutions may demand or pay. The stipulation may prescribe the methods of calculation and time period for payment or collection.

Section 47 A financial institution may outsource to external persons for providing services in its operation in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Division 4
Restriction on Granting of Credits

Section 48 Subject to Section 59, no financial institution shall, either directly or indirectly:

(1) grant credits, enter into transactions similar to credits granting or guarantee to its director, manager, deputy manager, assistant manager or person holding an equivalent position which is called otherwise, person with power of management, or to a related person of such persons, except granting of credits by means of credit card according to the maximum limit prescribed by the Bank of Thailand or granting of credits in form of employee benefits to such persons in accordance with the rule as prescribed in the notification of the Bank of Thailand;
(2) accept, give aval or intervene for honor of bills which its director, manager, deputy manager, assistant manager or person holding an equivalent position which is called otherwise, person with power of management, or a related person of such persons is a drawer, an issuer or an indorser;
(3) pay money or give other properties to its director, manager, deputy manager, assistant manager or person holding an equivalent position which is called otherwise, person with power of management, or a related person of such persons as remuneration for or by reason of any transaction or business of the financial institution other than gratuities, salaries, bonuses and other allowances which may normally be paid to them;
(4) sell, give or rent any properties to its director, manager, deputy manager, assistant manager, person holding an equivalent position which is called otherwise, person with power of management, major shareholder or a related person of such persons, or purchase or rent any property from such person with aggregate value exceeding that prescribed by the Bank of Thailand unless permitted by the Bank of Thailand;
(5) grant any other benefit to its director, manager, deputy manager, assistant manager or person holding an equivalent position which is called otherwise, person with power of management, or a related person of such persons under the rule as prescribed in the notification of the Bank of Thailand.

Section 49 Subject to Section 59, no financial institution shall grant credits, invest, incur contingent liabilities or enter into transactions similar to credits granting to major shareholders, or to business with related interest, either one or several transactions in combination, at the end of any one day for each person, in excess of five percent of any one or several types of its capital funds, or in excess of twenty-five percent of the total liabilities of such major shareholder or business with related interest, whichever is lower. In this regard, the calculation of credits, investments, contingent liabilities or transactions similar to credits granting shall include those granted to related person of the major shareholder as well.

Where it is deemed appropriate, the Bank of Thailand has the power to prescribe the maximum ratio in granting credits, investing, incurring contingent liabilities or entering into transactions similar to credits granting to major shareholder or business with related interest to be higher than the ratio prescribed in the first paragraph in accordance with the rules as prescribed in the notification of the Bank of Thailand.

The granting of credits, investment, incurring of contingent liabilities or entering into transactions similar to credits granting as prescribed in the first paragraph shall be in accordance with the rule as prescribed in the notification of the Bank of Thailand.
Business with related interest under the first and second paragraph means a company that the financial institution, its director, person with power of management, or a related person of those persons hold shares in combination in excess of ten percent
of the total shares sold of such company.

Next Page

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