The Bank of Thailand has a vast coverage of duties and responsibilities such as maintaining stability of the economy, the financial system, the payment system, foreign exchange transactions, and financial institutions supervision. Specific set of legislations are drafted to authorize the Bank of Thailand to perform its various roles effectively. Laws related with the BOT’s direct and indirect responsibilities include:
Bank of Thailand Act: This act sets out objectives, work scope, and organization structure of the BOT in accordance with the international central banking standard.
Currency Act: This act lays out the BOT’s roles in managing international reserves and maintaining currency reserve to ensure the stability and confidence in the baht. It also describes the BOT’s duties in designing, printing, issuing, managing banknotes so that there are adequate quality banknotes in circulation.
Exchange Control Act: The act sets out the BOT’s roles in controlling and restricting currency exchange or other operations in which concerning foreign currency transactions.
Financial Institutions Businesses Act: This act authorizes the BOT to supervise financial institutions, ensuring they have risk management capability and their board, management, and staffs comply with good governance rules so as to limit any risks that may cause damage to the general public’s deposits.
Deposit Protection Agency Act: The prime objective of this act is to ensure that deposits at financial institutions are protected. Financial institutions are required to contribute to the agency in proportion to their deposit base. The agency will use the contributed fund to repay depositors in case any financial institution bankrupts and the authority revokes its bank license.
Credit Information Business Act : This law paves way for financial institutions to access data on financial status and credit record of clients, allowing them to figure out how much debt the client already has with other financial institutions and help them assess financial risk of their clients more accurately. The access to these crucial information will not only help limiting probability of new nonperforming loans but will also strengthen financial status of financial institution and the overall banking system.
Emergency Decree on provision of financial aid to people suffered from the flood: This law empowers the BOT to temporarily lend fund to financial institutions, which will re-lend at special low rate to people suffered from the devastating flood in 2011 and was in dire need of financial assistance. The aid played a significant role in reviving the country’s economy.
Other than the legislations listed above, there also are other rules, regulations, and measures that are issued by either the Bank of Thailand or other agencies. They can be found from the following sources:
- BOT Notifications/Circulars
- The Securities and Exchange Commission
- The Consumer Protection Board
- Credit Information Protection Committee