Forex reforms underway, ease of doing business increasing
The Bank of Thailand is undertaking a series of regulatory reforms covering foreign-exchange transactions to make it easier for companies to do business and increase national competitiveness, a bank official wrote last week as the government said it is hoping for a rise in the World Bank’s Ease of Doing Business Index this year because of its own series of reforms.
“From now on until the end of this year, the Bank of Thailand will be rolling out various steps of the reform,’’ wrote Tunyathon Koonprasert, a senior analyst with the Financial Markets Operations Group at the Bank of Thailand, in a column in the Bangkok Post newspaper. “The list includes lessening the tedious paperwork and approval processes that companies and individuals previously had to deal with when conducting foreign-exchange transactions, and switching from paper-based submissions to more electronic and automated alternatives.”
Tunyathon described the process of carrying out foreign exchange transactions with local banks as “lengthy and wearisome,’’ noting that many documents are required and they have to be prepared, stamped, signed and verified. Some documents, such as complex loan agreements, may be hundreds of pages long, and each page is required to be signed; a tedious chore that many have experienced when dealing with official agencies.
To analyze the current regulations and find the best ways to reduce the burden they place on businesses and individuals, the Bank of Thailand engaged consultants that specialize in working with advanced and industrialized nations on regulatory reforms, and then created a working committee consisting of bank officials and representatives of the private sector to review proposed regulatory changes and provide feedback to ensure any changes were business friendly.
“Another piece of good news is that entities can now unwind their foreign-exchange hedging transactions as well as hedge foreign-exchange exposure on behalf of their affiliate companies. This should greatly help companies reduce compliance costs and time spent on administrative work, as well as increase the efficiency of business operations and risk management,” Tunyathon wrote.
He added that foreigners will also benefit from the reforms. “Foreign companies investing in Thailand or the Greater Mekong Subregion will be able to obtain direct loans in Thai baht from banks to facilitate their funding and investment,” he said. “All of this is only the beginning. The Bank intends to extend the reforms beyond foreign-exchange regulations to other areas under its authority in the future.”
Meanwhile, a government official said last week that he believed Thailand should rise several places in the World Bank’s Ease of Doing Business Index that will be published in October because of several steps the government has taken to cut red tape.
“Thailand has made very good progress in four key areas – starting businesses, registering assets, the system for taking care of minor shareholders and better practices in handling bankruptcies,” said Tossaporn Sirisamphan, secretary-general of the Office of the Public Sector Development Commission, and the office expects Thailand’s ranking in the World Bank’s index to rise.
Photo courtesy of www.bot.or.th