Financial Institutions and Financial Service Providers Policy

  • 1.

    Principles of formulating financial institution and financial service provider policy

The BOT formulated its financial institution and financial service provider policies and supervisory standards under 4 following principles. 



4 Principles of Formulating Policy

  • 2.

    Process of policy formulation and implementation

The BOT has prudent and concise procedures for making policies and regulations for supervising financial institutions and financial service providers through the Regulatory Impact Assessment process (RIA), which is a systemic approach to critically assessing the problem's cause, outcomes, and proper alternatives, by taking into account the proportionality, cost-benefit impacts, risk reduction approaches and hearing from the public including the consideration of Financial Institutions Policy Committee (FIPC) as well.

After imposing the policies and regulations, the BOT will closely monitor and reviews the principle to ensure its effectiveness and not be an unnecessary burden on financial institutions and financial service providers.

  • 3.

    Recovery and Resolution

In addition to regulating and supervising financial institutions ensuring their stability and soundness, the BOT also requires financial institutions to develop a recovery plan to ensure that financial institutions are well-prepared in advance for handling potential distress that may arise in the future. This shall be developed while financial institutions are robust. A systemic preparation would be one of the mechanisms that help strengthen the overall economic and financial stability. Moreover, the BOT established a resolution framework with a transparent and prudent decision-making process, along with sufficient recovery tools to ensure the continuity of critical functions and avoid significant adverse effects on the overall economy and financial system.