The Bank of Thailand is strengthening its supervision of lending and payment services provided by non-banks to ensure fair treatment of consumers and curb irregular transactions, according to its governor.
Vitai Ratanakorn, head of the central bank, said in a Facebook post on Friday that the regulator will emphasise supervision of non-banks, covering both lending and payment services, to ensure fair treatment of consumers and prevent irregular transactions.
The central bank will maintain its core mandate of macroeconomic stability, even as risks to price and financial stability have declined significantly, he noted.
Before the war in the Middle East, inflation was relatively low and even negative at times, while banks' performance and capital positions were very strong -- perhaps even too strong, Mr Vitai said. Meanwhile, the country's economic problems are related to its growth rate and growth potential, both of which have been declining due to numerous structural problems.
"If we simply analyse problems, criticise others and fail to take action, the economy will continue to grow more slowly," he said.
Businesses and households will see their incomes decline to the point where they can no longer cover their expenses, leading to non-performing loans and undermining macroeconomic stability, Mr Vitai said.
"What is the point of the central bank achieving stability targets if the economy continues to deteriorate, businesses shut down and many more people fall into poverty?" he asked in his Facebook post.
Amid heightened uncertainty, the central bank seeks to address structural problems in four areas, including household debt and promoting financial inclusion by improving access to credit for small and medium-sized enterprises (SMEs) and individuals. The regulator wants to ensure fairer costs for financial services for individuals and SMEs, including fees and interest rates. In addition, the regulator wants to prevent the financial system from being used to facilitate illicit capital flows and corruption.
"As risks change, the central bank must adapt. If we are static, we cannot perform our role effectively or fulfil our responsibilities as we should, even though staying the same may be more comfortable and easier," Mr Vitai said.
The central bank recently opened a public hearing on proposed rules to strengthen the risk management of cash-related transactions worth at least 5 million baht, as it seeks to prevent financial institutions from being used for money laundering and other illicit activities.
The regulator has been working to standardise 19 fee items in the banking sector to reduce financial costs for SMEs. The bank also implemented two loan programmes, SME Credit Boost and SME Secured Plus, to help businesses gain better access to funding. In addition, the central bank introduced a long-term debt restructuring programme for household debt.
