Deposit insurance Thailand



The Deposit Protection Agency (DPA) Act is now deliberated in Thai Parliament

after the Cabinet approved the bill on August 28, 2007.

The main points of this bill are as follows :

1.To set up the DPA to be a juristic person.
2.To set up the deposit protection fund.
3.To set rules and regulations of reimbursement.
4.To ensure that the DPA reimburses financial institution's client in case of default.
5.To set up penalties for non compliant institutions or persons that use symbols to identify their business that they are covered under this act.
The Finance Ministry is intent on passing the bill during the current government's term for fear that an elected government would lack the political will to do so.

''If this government does not pass the law, an elected one may never do so for fear of losing popularity,'' and 'If we can't enact this law, we should be ashamed. Indonesia did so three or four years ago already.'' said Sommai Phasee, the deputy finance minister. Bangkok post reported recently.

If this bill sails smoothly through Thai Parliament, it may become law within 2007.

Subsequently, the DPA (formerly the 'Deposit Insurance Agency') would likely be established within the first half of 2008. Then, the deposit protection will be gradually reduced to only THB1 million per depositor per financial institution over the next four years.

Speaking at a seminar on "In-depth Analysis of the DPA Act," Ruechukorn Siriyothin,director of the BOT Programme Service Office, said the BOT would conduct field trips to give the public a better understanding of the act and its implications for existing clientale. It would enable people to decide to deposit money with commercial banks based mainly on the operating performance and sound financial position of the banks rather than hefty interest rates. The Business day reported.

Cautious investors who are not fully covered by the DPA should be careful how strong of banks they deposit with. Deposit protection was pioneered by the U.S. in 1933 following a number of bank failures in the Depression. Initially it was set at $2,500, but it has since been raised and now guarantees up to $100,000 per depositor per bank.

According to the Bank of Thailand, 98.7% of Thailand's 79 million deposit accounts have balances of less than one million baht and would be fully covered by the new law.




The complete deposit potecion system was in introduced in Thailand by the establishment of the Deposit Protection Agency (DPA) on 11 August 2008, in accordance with the Deposit Protection Agency Act B.E. 2551. The objectives of the Agency as specified by law are providing protection to deposits in financial institutions system; administration of institutions subject to control under the Financial Institutions Businesses Act and liquidation of financial institutions whose licenses have been revoked. Deposit in Thailand is fully guaranteed until September 2011, It will be decreace to THB 1,000,000 in 2012



Thailand – Deposit Protection Agency
The Deposit Protection Agency (DPA) was established under the Deposit Protection Agency Act B.E. 2551 (2008), and came into force on August 11, 2008. The main objective of DPA is to provide protection to depositors so that their deposits would be rapidly reimbursed in the unlikely events of failed financial institutions. DPA provides protection to domestic deposits denominated in Thai Baht, namely current accounts, savings accounts, term accounts or other similar feature accounts under different titles.


The insured deposits exclude deposits in the Non-Resident Baht Account which is the account opened for special purposes according to the Exchange
Control Act, deposits embedded with derivatives and interbank deposits. Commercial banks, finance companies and credit foncier companies in Thailand are compulsorily under the deposit protection system. Extension of
coverage to other financial institutions established under special laws can be made by promulgation of Royal Decree. As of December 2008, there were 41 member financial institutions under the Deposit Protection Agency, including 18 commercial banks registered in Thailand, 16 branches of foreign banks, 4 finance companies and 3 credit foncier companies.

Prior to the establishment of DPA, blanket guarantee had been employed since 1997. The transitional from the blanket guarantee is designed to be  gradually phased out to the coverage of Baht 1 million per depositor per
financial institution in 4 years from 11 August 2012 onwards.


 The 4 year transition was planned to be Baht 100 million, Baht 50 million and Baht 10 million in the second, third and fourth year respectively. In the latter half of 2008, the financial crisis in the US adversely affected the Thai economic and financial positions to extend the period of blanket guarantee for two more years, until 10 August 2011 and to increase the coverage of the fourth year or from 11 August 2011 to 10 August 2012 to Baht 50 million. The extension of the blanket guarantee was done with the purpose to provide a precaution measure against any negative effect and to maintain confidence of depositors in the system.  Financial institutions are obliged to remit premiums to the Deposit Protection Agency twice a year, within the last working day of June and December.


The calculation is based on monthly average amount of deposits of prior 6-month period. The premium rate is 0.4 percent per annum based on total deposit of insured typed. From 2010 onwards, the daily average amount of deposits will be exercised in calculation of the premium. DPA is empowered to request the financial institutions to submit any information and reports. However, DPA and the Bank of Thailand, supervisory  authority, shall exchange information in order to avoid duplication of data reported by the financial institutions.

In case where the Bank of Thailand places any financial institution under control, DPA shall submit a list of nominees to be appointed as members of the Control Committee. DPA shall also act as liquidator of failed financial



BANGKOK (Dow Jones)--Thai commercial banks won't have any liquidity problems when the deposit protections provided by the Deposit Protection Agency Act are scaled back as scheduled starting in August, Bank of Thailand Assistant Gov. Sorasit Soontornkes said late Thursday.

The Deposit Protection Agency Act, which took effect in August 2008, extends full protection to deposits in the event of a financial crisis.

Starting in August, deposits of up to only THB50 million per account per bank will be protected. From August 2012 onwards, the deposit protection will be scaled back to THB1 million per account per bank.

To continue receiving full protection, wealthy depositors are expected to spread their savings around to multiple banks.

"Thai commercial banks passed the stress test on their liquidity status and capability to handle the situation both in the worst and normal case scenarios," Sorasit told reporters.

He added that banks have used financial tools such as Bills of Exchange to support the liquidity change as the deposit protections are scaled back.

Thai banks generally have capital amounting to around 15%-16% of their risk-weighted assets, above the 8% requirement.

As of March, there were 78.8 million deposit accounts at commercial banks holding a combined THB7.58 trillion ($249.5 billion).

Only 9,636 accounts contained more than THB50 million, accounting for 0.01% of the total number of accounts. However, such accounts held THB1.80 trillion of deposits, 23.7% of total deposits.


Copyright 2005-2019 List of banks in the World.