Thailand Real Estate

Banking deposits are now protectedin Thailand asThailand has now become the 99th country to have implimented a Deposit Protection Agency Act (DPA).

Banking deposits are now protectedin Thailand asThailand has now become the 99th country to have implimented a Deposit Protection Agency Act (DPA).

The DPA is to be used to provide limited protection to banking deposits - in the event that any of the bank expereince as run on the bank as has been seen in the UK not so long ago. The DPA becomes effective as from next week the 11 August 2008.

Besides the fact that the DPA provides protection to consumers it also creates financial discipline for depositors and without a doubt will ensures public confidence in the banking system in Thailand. The later is important as it helps to stimulate consumer savings and strengthen the stability of the banking system.

The DPA will gradually replace the current blanket coverage of the Financial Institutions Development Fund.

The last data released from the Bank of Thailand in December last year showed that there were about 73.3 million accounts of which less than 98.9 per cent of which held less than Bt1 million. There are however no statistics as to which percentage of the 73.3 million accounts held are actual duplications of users. It is common practise in Thailand for employees to open a bank account with the same banking institution as their employers. Hence many people hold more than one banking account.

Under the new DPA Act, all baht deposits are insured in the first year of implementation, or until August 2009 after which deposits of a maximum of Bt100 million will be insured in the second year, Bt50 million in the third year, Bt10 million in the fourth and Bt1 million in the fifth year on.

The Deposit Protection Agency Act henceforth will protect most if not all deposits at commercial banks.