World Bank and IMF praise Thai banks’ compliance

The World Bank and the International Monetary Fund (IMF) praised the compliance of Thailand’s banks with their financial standards, putting Thai banks on a par with counterparts in Singapore and Hong Kong, following a joint assessment.

The high marks from the two global financial institutions are part of a mounting body of evidence that a new era is underway in Thailand’s banking sector. Thailand’s banks once had a reputation for being closed, locked into old methods of doing business, and falling short in some areas of compliance. In recent years, however, Thai banks have restructured and reformed, and become more open to innovation, especially in the field of fintech or financial technologies.

The World Bank and the IMF jointly conduct the Financial Sector Assessment Program (FSAP). The program uses the Basel Core Principles for Effective Banking Supervision as a basis for its indicators and scoring.

The 2018-19 FSAP found Thai commercial banks fully compliant for 24 topics and largely compliant for five topics, said Bank of Thailand Governor Veerathai Santiprabhob. He said there were no categories in the program that assessed Thai banks as non-compliant or materially non-compliant.

The 24 topics included sound financial conditions, a strong capital base, high liquidity, good governance, consolidated supervision, and risk control. The findings put Thai commercial banks’ ratings on the same level as Hong Kong and Singapore, the region’s two premier financial centers.

The assessment also looked at the Bank of Thailand, Securities and Exchange Commission (SEC), and the Office of Insurance Commission (OIC), at the voluntary request of each institution.

“The World Bank and IMF support the central bank’s implementation of macroprudential policy to supervise and strengthen SFIs and cooperatives to commercial banks’ standards,” Veerathai said.

Photo courtesy of http://thainews.prd.go.th/en/news/detail/TCATG190719095735303