high competition among commercial banks to give loans and seek more savings benefit low-income people

BANGKOK, 17 July 2011 (NNT) – The Bank of Thailand (BoT) admitted high competition among commercial banks to give loans and seek more savings benefit low-income people.

BoT’s Onsite Examination Department 1 Senior Director Salinee Wangtal said the government policy to increase loans to small entrepreneurs by government’s banks have forced commercial banks to seek more savings. She said the current situation benefit small entrepreneurs and low income people, who did not have negotiating power, so that they would have a chance to get loans from banks and did not seek non-institutional loans. She explained that helping people’s finance was the mission of financial institutions.

She commented that having high competition was better than having banks colluding for profits of their own.

Ms Salinee admitted commercials banks had to pay tax and spend money supporting the Financial Institutions Development Fund (FIDF), while government’s banks did not; the competition was not fair. She however said commercial banks did not have much impact; they still had profits.