Division 6
Asset Classification and Provisioning

Section 60 A financial institution shall classify assets and contingent liabilities which are impaired or may be impaired, and shall write them off from the account or set provisions for such assets and contingent liabilities in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Where it is apparent that upon deducting the classified assets or contingent liabilities, which have not been written off or which provisions have not been set, from the capital fund, the remaining capital is less than the amount required to maintain in accordance with Section 30, the Bank of Thailand shall have the power to set any relevant measure to be taken by such financial institution until the rule under the first paragraph has been complied with.

If the stipulation under the first paragraph results in requiring the financial institution to increase asset write off from the account or to increase provision, an announcement shall be made no less than thirty days prior to the enforcement date.

Section 61 A financial institution shall set provision for unimpaired assets and contingent liabilities in accordance with the rule as prescribed in the notification of the Bank of Thailand, but shall not exceed five percent of the unimpaired assets and contingent liabilities.

Section 62 A financial institution shall cease recognizing and reverse accrued interest received as income from classified assets in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Division 7
Asset Management and Maintenance of Liquid Assets

Section 63 A financial institution shall manage the assets, liabilities and contingent liabilities such that they correlate to the deposits, borrowings or acceptance of money from the public in accordance with the rule as prescribed in the notification of the Bank of Thailand.

Section 64 A financial institution shall maintain liquid assets in proportion to the total or each type of deposits or loans at the ratio not less than that prescribed by the Bank of Thailand.

The Bank of Thailand may mandate a financial institution to maintain liquid assets of certain types or of all types, or set a ratio for each type on a general basis, or on a specific basis where appropriate.

If the stipulations in the first and second paragraph should cause financial institutions to increase the liquid asset ratio, an announcement shall be made no less than fifteen days prior to the enforcement date.

Section 65 Liquid assets consist of:
(1) cash;
(2) deposits at the Bank of Thailand;
(3) net deposits at other financial institutions;
(4) unencumbered certificate of deposits;
(5) unencumbered Thai Government securities, Bank of Thailand securities or Financial Institutions Development Fund securities;
(6) unencumbered debentures or bonds that the Ministry of Finance, Bank of Thailand or the Financial Institutions Development Fund guarantee either only the principal or both principal and interest;
(7) other assets which the Ministry of Finance, Bank of Thailand or the Financial Institutions Development Fund ultimately undertake to indemnify losses in accordance with the rule as prescribed in the notification by the Bank of Thailand;
(8) other assets which are liquid and creditworthy in accordance with the rule as prescribed in the notification of the Bank of Thailand. Liquid assets as in (4), (5) (6) and (8) must be transferrable.

Division 8
Accounting, Reporting and Auditors

Section 66 A financial institution shall prepare its accounts to state the actual operating performance and financial condition which must comply with the accounting standard prescribed by the professional institution, approved by relevant government authority and consistent with the rule as prescribed in the notification of the Bank of Thailand.

Section 67 A financial institution shall prepare financial statements for every six month period and twelve month period which is the accounting year of such financial institution in accordance with the forms prescribed in the notification of the Bank of Thailand. In addition, the financial statements shall be audited and provided opinion by an auditor approved by the Bank of Thailand as a qualified auditor of such accounting year.

The financial institution shall announce the financial statements prepared in accordance with the first paragraph which have been audited by an auditor and approved by director of the financial institution. Such financial statements shall be posted in a public area at the head office and branches of such financial institution, published in any media in accordance with the rule as prescribed in the notification of the Bank of Thailand, and submitted to the Bank of Thailand.

Preparation of financial statements for the first six month of the accounting year under the first paragraph, audit and opinion under the first paragraph and announcement and submission to the Bank of Thailand under the second paragraph shall be completed within three months from the end of the accounting period.

Preparation of annual financial statements for the accounting year under the first paragraph, audit and opinion under the first paragraph shall be completed prior to submission to the shareholder general meeting. The announcement and submission to the Bank of Thailand under the second paragraph shall be completed within twenty-one days from the date that the general shareholder meeting approves the financial statements. The whole process must not exceed four months from the end of the accounting year.

The provision of this Section shall not apply to foreign commercial bank’s branch.

Section 68 A foreign commercial bank’s branch shall publish the financial statement of such foreign commercial bank within one month from the date that the foreign commercial bank announces its financial statements by posting in an open area at the office of the foreign commercial bank’s branch.

A foreign commercial bank’s branch shall prepare financial statements every twelve month period which is the accounting year of such foreign commercial bank’s branch in accordance with the forms prescribed in the notification of the Bank of Thailand.

The foreign commercial bank’s branch shall announce the financial statements under the second paragraph which have been audited and which opinion has been provided by an auditor. Such financial statements shall be posted in a public area of the branch office of such foreign commercial bank’s branch, published in any media in accordance with the rule prescribed in the notification of the Bank of Thailand, and submitted to the Bank of Thailand.

Section 69 Auditors approved by the Bank of Thailand under Section 67 shall adhere to the code of conducts and ethics in performing audits in order to express opinions on the financial statements in accordance with the accounting standards stipulated in the law on accounting as well as any additional stipulations prescribed by the Bank of Thailand, and shall provide opinions on the financial statements within a suitable period to allow the financial institution to comply with the prescribed timeline under Section 67.
In the case where a financial institution has made any incorrect supporting accounting document or incorrect recording, the auditor shall disclose material fact of the accounts that affects the financial statements on the audit report which he has to affix signature to certify as well as report such matter to the Bank of Thailand.

The Bank of Thailand may withdraw its approval of any auditor, in accordance with Section 67, who fails to comply with the provision under the first or second paragraph.

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