Banking system, thai understanding of “liberalisation” : “foreign banks can open 2 more branches”

BoT pushes liberalisation under new plan, writes Bangkok Post.

As any normal human being, you would feel excited. So you decide to continue to read. And gradually, you feel baffled and eventually you end up in tears. That’s the beauty of Thailand : a perpetual source of exercise for our zygomatic muscles.

Ready ?

Thailand’s new financial master plan will offer greater opportunities for foreign banks, says Bank of Thailand governor Tarisa Watanagase. […] The central bank’s second financial-sector master plan would gradually liberalise the sector from 2010-14. […]

From 2012-13, the central bank will allow greater competition within the sector, starting by allowing foreign banks to open up to two branches in addition to their head offices.

Do you know, as of september, what is the total number of branches of commercial banks in Thailand ?

5 673.

I repeat : 5 673

I know, the proper word is : “surreal”. πŸ˜‰

(source BOT, FI_CB_060_S2)

So after giving a huge, astronomical boost to foreign banks (allowing them to open 2 more branches)… then come the final blow :

The central bank has no plans to offer new universal banking licences, seeing the current 15 banks as enough for the country’s needs.

Voila. πŸ˜‰ The words “competition” and “liberalisation” in Tarisa’s mouth mean : “we don’t need more banks”.

Surreal. Just surreal. But so tasty. Viva Tarisa !

PS : since I study Thailand, there is one great mystery I was unable to solve : do they really believe the non-sensical words coming out of their mouth… Or do they really think that foreigners are totally and definitely stupid ? To this day, I’m still wondering…

15 Responses to “Banking system, thai understanding of “liberalisation” : “foreign banks can open 2 more branches””

  1. 1 Bedwyr 6 November 2009 at 7:51 am

    Bedwyr can help you with that TC…

    The Thai capacity for self-delusion is remarkable. Of course everyone bends reality through their perceptual lens a little bit, but this is one of the very few things that Thais really excel at.

    You were right. They really do believe the nonsense. By the time they actually say something, the self-delusion process have already been at work and they really do believe it. Their life is so immersed in and saturated by the cradle-to-the-grave propaganda they are exposed to that they have actually come to believe their own lies. It’s all a bit tragic really.

    To many Thais (not all, mainly the ones with what Bedwyr calls “the rectal view”), Thais are smart, honest and hard-working. It never occurs to them to ask why the book of Thai high-achievers in any field is so dismally thin. It’s only because foreigners don’t understand them, and therefore don’t recognise their true genius.

    Enuff said.

  2. 2 generous sponsor 6 November 2009 at 10:56 am

    so much for ever getting up to 1% on my time deposits or savings accounts. to khun tarisa’s credit, though, the article does mention that foreign banks can change their status to “bank subsidiaries” and operate up to 20 branches. the devil is in the details though (10 billion baht tier one capital and passing “criteria on ratings and risk management practices”).

  3. 3 thaichris 6 November 2009 at 1:14 pm


    Do they really think that foreigners are totally and definitely stupid? Yes, they do! And you know what – they are right!

    Look at these thousands of foreigners which think they can beat the system. They “buy” a house in the name of there “bar” wife and they think they realy own it. They buy a condo and they think, the building will be maintained. The pay thre maids 5’000 THB per month and they think the maid will not steal there money out of the drawer.

    Everybody knows that the stock exchange of Thailand is pur casino. But the foreigners still invest. They know that there are to many 5 starts hotels and exotic spa’s and they still open another one. Maybe it’s the country itself which sucks out the brain – of locals as well as of foreigners. On the other hand – that is why we love this country.

  4. 4 Igor Christodoulou 6 November 2009 at 1:32 pm

    It all sounds to me like ‘perestroika’ sounded in the former Soviet satellites more than twenty years ago… We know how it all finished… Communists wanted to show they were hip, too… They weren’t… So many similarities here…, with different labels, naturally…

  5. 5 ThaiCrisis 6 November 2009 at 2:26 pm

    Thaichris : it was of course a rethorical question. πŸ˜‰ And my prefered answer is : both.

  6. 6 ray 6 November 2009 at 4:58 pm

    well as rothschild said ” competition is sin”.. as for thaichris it is the gullible foriegners who u describe. ( the ones with the bar price).. as for the set it si so small that foreigners with a few billion bahts can actuially make good money because the market cap is so small htey can move the market either way. in set it is always the local small investors who are left loser in this zero sum game.

  7. 7 African Nomad 6 November 2009 at 8:09 pm

    Bedwyr said:
    “It’s only because foreigners don’t understand them, and therefore don’t recognise their true genius.”

    A classic statement. πŸ™‚

    Isn’t the national IQ barely at ‘functional moron’ level?

  8. 8 fall 6 November 2009 at 10:08 pm

    Thai people dont like “competition”, they like “compromise”.
    As in, take the stinking deal or stay off.

  9. 9 Marvo 7 November 2009 at 9:25 am

    @ fall,
    Are you talking of the mentality where in a shrinking market, the “seller” puts their prices up because demand (and hence revenue) has fallen! I’ve been looking around for bargains (anywhere) in Thailand since the economic downward spiral began and can I find any? The hell I can.

    On top of that, developers are still building like crazy in my town, shop houses are still being rented out as fast as they can be built, new motorbikes appearing on the street every day. Nobody seems to have told anybody here that there’s supposed to be a recession on.

    Oh, there is one visible sign of problems somewhere in the outside world, that is that the 100 or so real estate agents in town selling (trying to) properties to unsuspecting foreigners seem to have met with lean times finally.

    As for Thai business (not tourist reliant) it seems like business as usual.

  10. 10 George P Tuckeer 7 November 2009 at 5:45 pm

    Like Marvo, I scratch my head.
    In other places, economic downturns become quickly visible on Main street, with shuttered shops, property price drops, more pan-handlers, etc.

    In Thailand, it’s so much harder to find visible signs of downturns even as economic statistics indicate otherwise.

  11. 11 How the end always is 7 November 2009 at 9:30 pm

    ” Functional Moron Level” , that is the quote of the year as far as I am concerned.

  12. 12 Bedwyr 8 November 2009 at 9:11 am

    ^ Me too. it sort of fits quite nicely with what else is known. Facts ma’a,. just the facts The last government survey set the mean IQ of Thai children at just 87.8, with pockets of populations in the North and North-East where the mean was in the 60’s.

    A truly catastrophic situation for those who like to pretend that Thailand is still developing.

    I saw elsewhere that someone described Thailand as ‘the house that Jack built’. I agree. And Jack likes it just the way it is. It suits Jack’s purpose very nicely.

    To most people with an IQ of more than 100, Thailand is a midden where people are exploited for the benefit of a feudal ruling class. To Bedwyr it is a ticking bomb, and he was saying so a year ago, long before it became fashionable to talk about the possibility of civil war there.

  13. 13 ray 8 November 2009 at 12:02 pm

    marvo. george p.t.

    the reason the downturn is not so visible in bangkok and thailand is because after 1997 crisis hte developer has to put up to 30-40% of his own money when coming up with projects unlike in the west where up to 100% financing is available. i live in samui and in bangkok b4 and most of my friends are in real estate, mostly hotels.

    the occupancy is certainly down ( 30-50%) but they have not borrowed too much so they can still make the paymnts ot the bank. also the u can talk to banks if u want to reduce yr monthly paymnts and the banks are happy to comply.

    one of the main reasons the condo prices are not coming down is also because the developers in bkk compare the prices to singapore and hongkong and argue that its pretty cheap.( they really believe that). what they dont want to hear that the political situation is thailand is volatile to say the least, as we witnessed on 14th -16th oct due to rumours. my personal view is that was just a preview of what could really happen.
    in real estate its all about holding power.

  14. 14 Chris 9 November 2009 at 1:26 pm

    Another reason why the world economic recession seems to be less visible at “street level” in Thailand is that while the “official” Thailand GNP is somewhere between 260 and 300 billion USD per year, the “unofficial” Thailand GNP is, at least in my and some other folks’ view, probably double that as so much of the Thailand economy is “off-the-books”, “under-the-table”, “not officially legal” and transacted in cash……….

  15. 15 ThaiCrisis 9 November 2009 at 2:29 pm

    Chris : you have a very good point there. We talked about it in previous discussions. But again, it’s a HUGE factor.

    “grey economy”, “informal economy”, “cushion”, “illegal”, whatever we want to call it, this phenomenon is a key.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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