Banking in Thailand is Well Established
The banking industry is well established in Thailand, and there are both local and international banks operating all over the country. It started in November 1865 when the Hong Kong & Shanghai Banking Corporation, then an eight-month-old company, appointed agents in Bangkok. In 1888, the bank upgraded this agency to a branch, becoming the first bank to open an office in Thailand. Others followed although it took nearly two decades for a local company to join in.
In those days, banks kept direct contact with their clients. Bill-collecting offices, for instance, employed teams of fit young men to remind late customers of their overdue loans. They also kept chains, nails, and padlocks to seal the warehouses of recalcitrant debtors. These days are gone. Thailand now has a modern banking sector.
Commercial banking is changing rapidly. Banks are providing a greater array of services. They accept time savings, and demand deposits and they lend money through overdrafts, loans, bill discounts, and leasing. Activities also include fee-based services such as feasibility studies, loan syndication, consulting for mergers and acquisitions, and custodian services. Also, banks may underwrite, issue, and trade debt instruments and issue negotiable certificates of deposit (time deposits with variable maturity).
Commercial banks have traditionally played the most important role in collecting savings and financing investments. They are the biggest financial institutions in Thailand, although they are not numerous. Until recently, the Thai government restricted entry in the industry. In 2001, the kingdom had 13 local commercial banks and 21 foreign banks with branch offices.
Thai banks are small compared to their European, American, and Japanese counterparts, although some are prominent by regional standards. Thailand’s leading bank, for instance, is also one of the top commercial banks in Southeast Asia.
A few of these prominent banks dominate the local market. In June 1993, the top three local banks controlled over half of the domestic market. Together, they accounted for about 54 percent of the deposits, tendings, and assets of domestic banks. They also operated large networks of branches more than 400 each.
Most Thai banks, regardless of size, are profitable. In 1992, the average Thai commercial bank earned US$50 million in net profits. The bulk of the revenues came from the spread between lending and borrowing rates. Because of protection, these spreads remained high, at times nearing five percentage points.
This is, however, changing. Recent reforms have increased competition between Thai commercial banks and other local and foreign financial institutions. Local banks must now rely less on interest income and more on fee-based services.
These are expanding. Since 1992, commercial banks may underwrite, issue, and trade debt instruments; and provide information and advisory services. Banks responded by increasing their investment-, merchant-, and private-banking divisions.
The most visible changes are, perhaps, those of retail banking services. Operations are getting more efficient as banks upgrade computer technology. They also offer new products like telephone banking, and they expand their network of branches and automatic teller machines (ATM). Some of these machines are even linked to a pool so that people may use the ATM of any affiliated bank. So far, over half of the local banks have joined the pool.
Operations are also getting closer to international practice. Since 1993, banks have adopted international capital guidelines set by the Bank of International Settlements for accounting. The Bank of Thailand also requested commercial banks to declare their criteria for deposits and loan rates, putting an end to negotiable rates.
Local banks, however, are still too small to finance the growth of the Thai economy, The rapid development of capital-intensive industries is straining resources. Large-scale projects require international financing through syndicated loans.
Special Purpose Banks
Special-purpose banks finance specific economic sectors. They are state-owned companies whose activities are controlled by the Thai administration. They extend loans at preferential interest rates, but they may deal only with specific clients and projects. There are three such banks the Government Savings Bank, the Bank for Agriculture and Agricultural Cooperatives, and the Government Housing- Bank.
Government Saving Bank
The Government Savings Bank specializes in collecting small savings. It obtains most of its funds through demand, savings, time, and fixed deposits and premium savings bonds. The bank has an extensive network of offices throughout the country. By the end of 1992, it operated 512 branches, I I mobile units (both on land and water), and one district representative. Most of these offices, some 87 percent, are located outside of Bangkok.
The bank makes great efforts to collect savings from small depositors. In Bangkok, for instance, it has been running a door-to-door floating service for some 30 years. Its vessel plies the city’s canals six days a week. Customers put a small flag outside their homes to indicate that they want to make a transaction and get the floating bank to stop at their door.
Collecting small savings is a long-standing goal for the Thai government. The Government Savings Bank finds its origin back to 1913 when King Rama VI set up the Savings Office. The office was later transferred to the Post & Telegraph Department, and in 1947 its assets and liabilities were finally taken over by -the newly created Government Savings Bank. Because of the large and poor rural Population, small savings are still an essential source of funds.
These funds have traditionally financed government projects, but this is changing. Until recently, the Government Savings Bank invested most of its funds in government securities, bonds, and Promissory notes. Dealings with the private sector are, however, increasing as the bank extends more loans to enterprises and individuals. In 1992, claims on households and businesses accounted for 10 percent of total assets, up from only I percent in 1986.
The Government Savings Bank has now embarked on a significant Program of diversification. It has formed joint ventures with many private and public enterprises to expand its activities. Its extensive network of offices is especially valuable for distributing financial products like mutual funds, insurance, and leasing services., nationwide. The bank is also keen to improve efficiency, setting up training programs for staff and investing in computers.
Thai banks provide a wide range of services throughout the country. Most foreign banks are represented, however, at this stage they offer limited services to the individual consumer. Banking hours are generally from 08:30-15:30, Monday through Friday, except on public and bank holidays. It is best to confirm the business hours of your chosen bank at the time of opening an account
All banks require several forms of identification (i.e., passport, work permit, current credit cards, etc.) and most will request a letter of introduction from your employer along with details of your current visa status. Phone ahead to determine what your bank requires. Usually, it comes down to the following:
Relevant Documents for Opening Saving Bank Account
- Work Permit
- Require Thai Nationality reference (For International Bank Account only)
- A minimum deposit amount 500 Baht for a Thai bank and 5,000 for Standard Charter Bank or 100,000 Baht for HSBC (The remaining amount of each month must not less than 500,000 Baht)
- The minimum deposit at the International Bank Account as US Dollar is up to the bank such as USD 10,000 for Standard Charter Bank or USD 15,000 for HSBC.
- Recommendation letter from an origin country bank (For International Bank Account only – Deposit as US Dollar)
- The first deposit for the International Bank Account must be transferred from overseas only.
Choosing Your Bank
Suburban branches of the larger local banks are widespread and can be more convenient for long-term residents. At the main branches, English is spoken, and the staffs are usually most helpful. For easy withdrawal access, lodge your signature at the local branch as well as the parent branch. N.B. If you wish to withdraw at a branch other than the one you opened your account with, identification will be required (usually your passport). Determine all fees up front, so there are no surprises at the end of the month.
If your stay in Thailand is short-term and your funds are not paid in Baht, maintaining your overseas accounts may be your best option. Check with your bank to see what (if any) services they provide overseas. Larger international banks offer telephone banking, and this service is accessible to overseas customers. Listed below are head offices for banks represented in Bangkok. Thai banks have many branches, addresses of which can be found in the telephone directory or check with the main office.
List of Banks
ANZ Bank Rep Office, 9th Fl, Diethelm Tower A, 93/1 Witthayu (Wireless) Rd. 24 hours. Tel: 0-2256-6350, 0-2256-6358. Fax: 0-2256-6347. Telex: 21583. Restricted services offered; telephone for information.
Bangkok Bank 333 Silom Rd. Tel: 231-4333. After hours: 0-2230-2345. Fax: 0-2231-4233.
Bank of America Bank of America Center, 2/2 Witthayu (Wireless) Rd. Tel: 0-2250-0775-7 Fax: 0-2250-0775-7.
Bank of Ayudhya 1222 Rama III Rd. Tel: 0-2296-2000, 0-2683-1000. Fax: 0-2683-1304.
Bank of Tokyo-Mitsubishi Harindhorn Tower, 54 Sathorn Nua (North) Rd. Tel: 0-2266-3011. Fax: 0-2266-3054-5.
Chase Manhattan Bank Bubhajit Bldg, 20 Sathorn Nua (North) Rd. Tel: 0-2234-5992-5, 0-2238-1720-4. Fax: 0-2234-8386.
Citibank 82 Sathorn Nua (North) Rd. Tel: 0-2232-2000. Fax: 0-2639-2560.
Credit Agricole Indosuez 152 Witthayu (Wireless) Rd. Tel: 0-2651-4590-2. Fax: 0-2651-4586-8.
Deutsche Bank Wireless Bldg, 208 Witthayu(Wireless)Rd. Tel: 0-2651-5000. Fax: 0-2651-5151
HSBC Uchu Liang Bldg, 968 Rama IV, Bangrak. Tel: 0-2614-4000. Fax: 0-2632-4818.
National Australia Bank Rep Office, 16th Fl, Sathorn Thani I Bldg, 90 Sathorn Nua (North) Rd. Tel: 0-2236-6016-7. Fax: 0-2236-6018. Restricted services offered; telephone for information.
Siam Commercial Bank 9 Rachadapisek Rd, Lad Yao. Tel: 0-2544-2828-9, 0-2544-1111. After hours: 0-2544-5000. Fax: 0-2937-7645, 0-2937-7704.
Standard Chartered Bank Abdulrahim Place, 990 Rama IV Rd. Tel: 0-2724-2000 Fax: 0-2636-1199.
Kasikorn Bank PCL: 1 Soi Thai Farmers Lane, Rat Burana Rd. Tel: 0-2470-1199, 0-2470-1122. Fax: 0-2470-1144 -5. After hours Emergency 0-2888-8888
Westpac Banking Corp Rep Office, Unit E, 8th Fl, Kamol Sukosol Bldg, 317 Silom Rd. Tel: 0-2234-2650. Fax: 0-2231-0015. Restricted services offered; telephone for information.
Credit cards are widely accepted, and most businesses display stickers for those they will accept. To avoid problems with lost/stolen credit cards, register your card with Credit Card Sentinel offices in Australia Sydney Tel: (61-2) 9978-9388, New Zealand, UK, Canada, and the USA.
American Express SP Bldg, 388 Pahonyothin Rd. Tel: 0-2273-5100. After hours for lost cards, Tel: 0-2273-0022. Mon – Fri 0800 to 1700 hrs.
Diners Club 12th Fl, Silom Bldg, 191 Silom Rd. Tel: 0-2238-2920-9, 0-2238-2910.
After hours: 0-2238-2680.
Master Card For lost or stolen credit cards Tel: 0-2256-7326-7 (24 hours).
Visa Card Local banks and some foreign banks issue Visa cards. For lost or stolen cards, Tel: 0-2256-7326 -7 (24 hours).
American Express SEA Tour Office, 4th Fl, Siam Centre, Rama I Rd. Tel: 0-2273-5100, 0-2273-0044. After hours 0-2273-0022. Thomas Cook 12th Fl, Sathorn City Tower, 175 Sathorn Tai (South) Rd. Tel: 0-2679-5521 -3.
Major currency bills and travelers’ cheques are cashed easily at hotels, tourist shops, all provincial banks, shopping centers, and moneychangers. Travelers’ cheques are best changed in banks; you will need your passport. Rates of exchange at banks or authorized moneychangers are better than those at hotels and department stores. Current exchange rates can be checked in daily newspapers, at banks, and at moneychangers.
Foreign exchange control
For the expatriate living in Thailand, the most critical financial regulation is the Exchange Control Act, which regulates the amount of foreign currency a bank may issue to any person. Consult with your bank manager concerning your requirements regarding remittances of funds and international travel.