Chapter 4
Examination of Financial Institutions

Section 84 For the purpose of financial institution’s good governance, the Bank of Thailand shall have power to prescribe in the notification requiring a financial institution to set up committees as well as to prescribe the components, qualifications, and powers and duties of the committees.

Section 85 The Bank of Thailand shall have power to appoint its officers or external persons as financial institution examiners to examine business, assets and liabilities of financial institutions, parent company, subsidiary or affiliate, and company within financial business group as well as debtor and related person of such financial institution, whether on a general or specific basis.

The financial institution examiner shall have powers and duties to:
(1) order a director, an officer or employee of a financial institution, an auditor of a financial institution and a person responsible for collecting or processing data of the financial institution by using either computer system or any other instrument, to testify on the business, assets and liabilities of the financial institution, to submit copies of or to present information, account, document, seal or other evidences;
(2) enter into business premise of a financial institution or of a service provider supporting to a financial institution in order to examine the operations of the financial institution to be in compliance with this Act.
(3) enter into any premise in order to examine where there is a reasonable ground to suspect that there is any undertaking of business violating this Act or that there is evidence or document related to such offence, during the time between sunrise and sunset or during business hours of such premise. In case of incomplete examination after having entered and commenced, such examination may continue into the night or beyond the business hours of such premise as authorized by the Bank of Thailand;
(4) seize or attach property, document or thing related to an offence under this Act for the purpose of the examination or prosecution. In issuing such seizure or attachment order, rationale, necessity and right of the person whose properties are being seized or attached shall be stated;
(5) examine the condition or operation at the business premise of the parent company, subsidiary, affiliate and company within the financial business group of such financial institution, including to order relevant person to testify, submit copies of or present information, account, document, seal or other evidences pertaining to the business, assets and liabilities;
(6) examine the condition or operation at the business premise of the debtor or related person of a financial institution including to order relevant person to testify or present information, account, document, seal or other evidence pertaining to the business, assets and liabilities in the event that there is a reasonable ground to suspect that the financial institution has violated Section 48, Section 49, Section 50 Section 66 or there is reasonable ground to believe that a fraudulent offence is committed in the course of business of the financial institution.

For the performance of financial institution examiner’s duties under the first paragraph, a financial institution examiner shall have power to assign any person to assist in performing the examiner’s duties.

The financial institution examiner shall submit the examination report under the first paragraph to the Bank of Thailand in the forms as prescribed in the notification of the Bank of Thailand.

Section 86 In the performance of duty of the financial institution examiner and person under the third paragraph of Section 85, relevant persons shall provide due convenience as appropriate.

Section 87 In the performance of duty under Section 85, the financial institution examiner shall present the identification card issued by the Bank of Thailand to relevant persons.

The identification card of a financial institution examiner shall be in the form as prescribed in the notification of the Bank of Thailand.

Section 88 A financial institution examiner shall be an officer under the Criminal Code.

Chapter 5
Rectification of Condition or Operation of Financial Institutions

Section 89 In the case where any financial institution, director, manager or person with power of management violates or fails to comply with this Act, or stipulations or notifications issued by virtue of this Act, or rules attached to the license, the Bank of Thailand shall have power to take the following actions;

(1) to issue written warning to the financial institution or relevant person to refrain from actions in violation of, or to take action in compliance with this Act;
(2) to issue an order to prohibit any action in violation of or to take action in compliance with this Act or stipulations or notifications issued by virtue of this Act or rules attached to the license;
(3) to issue an order to remove any or all directors, managers or persons with power of management. Such order shall be deemed to be a resolution of the shareholder meeting;

In the case where the director, manager or person with power of management is removed under (3), if such person could prove that he is not involved in or is not responsible for such action, the Bank of Thailand may appoint such person to resume his former position.

Section 90 In the case where condition or operation of financial institution may cause damage to public interest, the Bank of Thailand shall have power to take the following actions:

(1) to order such financial institution to rectify the condition or operation;
(2) to order such financial institution to reduce or increase its capital or both within a specified period but shall not exceed ninety days from the date the financial institution receives the order. If such financial institution does not comply with or fails to comply with the order within the specified period, such order shall be deemed to be a resolution of the shareholder meeting from the end of specified period, except in the case of urgently necessary to sustain the condition and operation of the financial institution, the Bank of Thailand may order such financial institution to reduce or increase its capital or both immediately and such order shall be deemed to be a resolution of the shareholder meeting. In this regard, the provisions of Section 1117, Section 1220, Section 1222, Section 1224, Section 1225, Section 1226 of the Civil and Commercial Code, and the second paragraph (2) of Section 136 , Section 137, Section 139 and Section 141 of the Public Limited Company Act B.E. 2535 shall not apply to the reducing or increasing of capital, or the offering for sale of the newly issued shares
(3) to order such financial institution to suspend its operations, in whole or in part, within a specified period;
(4) to order such financial institution to immediately remove any or all of its directors, managers or persons with power of management and appoint other persons to replace the person so removed as appropriate. Such order shall be deemed to be a
resolution of the shareholder meeting;
(5) to order the control of or the closure of such financial institution’s business.

The Bank of Thailand shall report any action taken under the first paragraph to the Minister of Finance to acknowledge without delay and if the Bank of Thailand has issued a closure order under the first paragraph (5), it shall propose the Minister of
Finance to withdraw the license of such financial institution.

Section 91 Person whose employment is terminated due to the removal from the position of director, manager or person with power of management under Section 89 (3) or Section 90 (4) shall not be eligible for compensation under the law on labor protection or the law on state enterprise labor relations, or any other benefits under employment contract due to such dismissal except for the eligible benefits derived from the agreement under the law on provident fund.

Section 92 The following events shall be deemed that the financial institution’s condition or operation may cause damage to public interest:

(1) such financial institution, any of its director, manager or person with power of management violates the order issued under Section 89 (2);
(2) such financial institution, any of its director, manager or person with power of management violates or fails to comply with Section 30, Section 33, Section 34, Section 48, Section 49, Section 50, Section 51, Section 57, Section 58, Section 59, Section 60, Section 61, Section 63, or Section 64;
(3) such financial institution, any of its director, manager or person with power of management fails to prepare its account to state the actual operating performance and financial condition in accordance with Section 66, or makes false entry or falsifies account, document, to the extent that it cannot be evaluated the soundness of the financial institution’s condition and operation in compliance with the rules on capital fund, assets, liquid assets, provision, asset classification and other matters under this Act;
(4) such financial institution suspends repayment of its due obligation;
(5) such financial institution has incurred losses and the Bank of Thailand has a reason to anticipate that it is unable to maintain its capital fund as required by law, regardless of whether it is the event under Section 96 or not.

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