Supervision regime
Principles of supervision

The BOT supervises financial institutions established in accordance with the following laws;

1. The Financial Institutions Businesses Act B.E. 2551, supervising commercial banks, Finance companies and Credit Foncier business and

2) Other laws for instance Declaration of the Revolutionary Council No. 58 on the supervision of financial businesses that have broad impact with people (i.e. Credit card business and personal loans etc.)
Financial Institutions Policy Group and Supervision Group are responsible for supervising Financial Institution

Financial Institutions Policy Group (FIPG.)

FIPG is responsible for formulating the regulatory policies, criteria for the supervision and strategy of financial institutions and payment systems in order to foster the stability, strength and efficiency of financial institutions and payment systems, and also their competitive abilities in the market.

Financial Institutions Policy group consists of 3 departments, namely

Regulatory Policy Department is responsible for formulating the regulatory policies and supervisory criteria to ensure the stability of financial institutions in the aspects of risk and corporate governance as well as regulatory standard in compliance with the international standard. Furthermore, Regulatory Policy Department also formulates regulatory polices to financial businesses that have broad impact to people (i.e. Credit card business and personal loans etc) as well as coordinates with international organizations and central bank colleges from other countries in order to foster the creditability of Financial institution Regulation.​

Financial Institutions Strategy Department is responsible for 1) analyzing and monitoring the performance of financial institutions in order to maintain the overall stability of financial system 2) formulating strategies to support the development of financial institution system, for instance the implementation of financial Sector Master Plan 3) playing a role in stimulating the revision of financial institution laws 4) Formulating negotiation policies on the liberalization of financial services and banking services under WTO forum and other bilateral trade agreement forums.​​​

​Grants approvals to FIs and responses all queries from FIs and their financial group, assets management companies, and non-banks. Supervises the operations of them to ensure their compliance with relevant laws and regulations. Handles the licensing of new commercial banks, assets management companies and non-banks.

Regulatory Policy Department is responsible for formulating the regulatory policies and supervisory criteria to ensure the stability of financial institutions in the aspects of risk and corporate governance as well as regulatory standard in compliance with the international standard. Furthermore, Regulatory Policy Department also formulates regulatory polices to financial businesses that have broad impact to people (i.e. Credit card business and personal loans etc) as well as coordinates with international organizations and central bank colleges from other countries in order to foster the creditability of Financial institution Regulation.

Financial Institutions Strategy Department is responsible for 1) analyzing and monitoring the performance of financial institutions in order to maintain the overall stability of financial system 2) formulating strategies to support the development of financial institution system, for instance the implementation of financial Sector Master Plan 3) playing a role in stimulating the revision of financial institution laws 4) Formulating negotiation policies on the liberalization of financial services and banking services under WTO forum and other bilateral trade agreement forums.

Payment Systems Policy Department is responsible for formulating policies and promoting the development of financial infrastructure and payment system’s standard of the country, as well as the interconnectedness of international payment system in order to prepare for the upcoming ASEAN Economic Community 2015 (AEC 2015). Furthermore, the other main duties of the department are to ensure that the standard of supervision and evaluation of key Payment systems and risk management are in line with international standards. Additionally, the department is also responsible for monitoring and supervising those electronic payment service providers in accordance with the Royal Decree Regulating Electronic Payment Service Business, B.E. 2551.

Supervision Group (SVG.)

Supervises, examines, analyzes and monitors the financial condition, performance and risk management of individual FI and overall FI System, establishes an early warning system including licensing and granting approvals or waivers to SFIs, as well as taking actions with troubled or non-compliance FIs in order to ensure the safety and soundness of, and public confidence in, the financial institutions. There are 8 departments under the SVG as follows: 

PDD is responsible for formulating strategic plan of SVG, conducting annual on-site examination plan, enhancement the effectiveness of supervision, examination and monitoring of financial institutions, developing supervision manuals in line with international standards, arrangement training program to broaden knowledge and to enhance competency of examiners, handling as co-host to hold a meeting and seminar with international or domestic organizations for SVG and prepares annual action plan and budget in accordance with the BOT strategic objectives.

BD1-2 is responsible for conducting examination and assessment of risks of commercial banks , finance companies and credit foncier companies focusing on significant activities , financial performance and capital adequacy provisioning , earning , capability, corporate governance and compliance to determine the level of inherent risks and quality of risk management , the effectiveness of 3 lines of defense or Bank’s management will be notified of any weaknesses and are required to take corrective actions in a timely manner. ​​

BD 3 is responsible for examining asset management companies and non-banks in compliance with the conditions, criteria of BOT's notifications, and consumer protection. Furthermore, supervises and examines The National Credit Bureau to be in accordance with the law, and acts as secretariat of the Credit Information Protection Committee.

  
SRD is responsible for

1) supervising financial institutions under the department’s purview by examining and monitoring the financial institutions’ risk management with a particular focus on major transactions (Significant Activities), assessing financial conditions as well as evaluating their capital adequacy and provisioning, earning performances, corporate governances and compliance with laws and regulations.

2) monitoring and assessing risks to financial institutions as well as the dynamics of their operations and financial conditions both at individual institution level and system-wide to support on-going supervision and the formulation of related policies pertaining financial institutions.

3) developing and upgrading processes to resolve troubled financial institutions or financial system under liquidity or solvency problems, which includes conducting crisis simulation exercises in coordination with relevant departments on a regular basis.

4) developing innovative technology to support supervisory functions to enhance efficiency in risk monitoring and supervisory process, managing and controlling standard of financial institution data usage within supervision group.

SED is responsible for conducting on-site examination, off-site monitoring, and risk assessment, focusing on major transactions (Significant Activities: SA) of Specialized Financial Institutions (SFIs) ; overseeing corporate governance practices, compliance with the BOT's regulations and risk management and control of the SFIs; as well as issuing SFIs regulations, granting approvals or waivers to the SFIs in order to ensure that each SFI’s mandate be practically carried out and to ensure the safety and soundness of the SFIs and the stability of financial system.

FCD is responsible for formulating regulations and guidelines as well as supervising financial institutions, both on-site and off-site, on market conduct issues in order to ensure that financial service providers’ sales are not the forced, fraudulent , intrusive and exploited. FCD also formulates and enforces market conduct notifications in order to improve quality of end-to-end-process of risk management. Besides, disclosure of product information and quality of services are sufficiently provided to ensure for better decisions of customers and to encourage fair competition in the Thai financial system.

FCD collaborates with other regulators for an effective market conduct supervision. In addition, FCD gives advices on financial issues, handles complaints on financial services regarding service providers under BOT regulation for proper solutions.

RAD is responsible for supervising, examining and evaluating FIs' quantitative tools or risk model used in risk management and/or capital calculation for credit risk, market risk and operational risk e.g., Internal Rating Based (IRB) Approach, Internal Model Approach, Contingent Loss, Advance Measurement Approach (AMA), including the assessment of Bottom-up Stress Testing conducted by FIs.

Planning and Development Department (PDD) formulates strategic plan of SVG, prepares annual action plan and budget in accordance with the BOT strategic objectives, conducts annual on-site examination plan, develops supervision manuals, arranges training program to broaden knowledge and to enhance competency of examiners, and handles as co-host to hold a meeting and seminar with international or domestic organization for SVG.

• Financial Institution Applications Department (FIA) grants approvals or waivers to FIs; monitors and supervises all FIs on an ongoing basis to ensure their adherence to the terms and conditions imposed on them; and responses all queries from FIs and their financial group, assets management companies, and non-banks. Supervises the operations of them to ensure their compliance with relevant laws and regulations. In addition, FIA is responsible for the licensing of new commercial banks, assets management companies and non-banks.

Financial Institutions Monitoring and Analysis Department (FAD) analyzes and monitors financial condition and performance of overall FI system and Thai banks, analyzes and examines foreign banks, recommends corrective measures and procedures for FIs with weak financial conditions, as well as handles and coordinates with FIs regarding consumer complaints. FAD also supervises and examines performance of Credit Bureau Company.

On-Site Examination Department 1 and 2 (OE 1and 2) assess end-to-end process of all Significant Activities of FIs along with risk-based examination, financial condition and performance of FIs to ensure that they have carried out in accordance with laws and regulations and evaluate capital adequacy of FIs to handle risk in normal condition and crisis. OE 1 and 2 are also responsible for examining and following-up the operations of unlicensed or unauthorized financial businesses.

Conducting on-site examination, off-site monitoring, and risk assessment, focusing on major transactions (Significant Activities: SA) of Specialized Financial Institutions (SFIs); overseeing corporate governance practices, compliance with the BOT's regulations and risk management and control of the SFIs; as well as granting approvals or waivers to the SFIs in order to ensure that each SFI’s mandate be practically carried out and to ensure the safety and soundness of the SFIs and the stability of financial system.