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 Home > About Thailand > Economy > Tourism



Tourism has been Thailand's highest income generator since 1982, having grown at a healthy 16 percent per annum since 1980. In 1994 visitor arrivals reached a record 6,16 million. The Tourism authority of Thailand has worked closely with other agencies to develop tourism resources in the most efficient way. For example, with the Board of Investment it periodically reviews policy regarding promotion of investment in tourist-related facilities, while it works with funding institutions to determine which tourism projects should receive investment.




Thailand has a substantial number of financial institutions, namely, commercial banks, finance companies, agricultural cooperatives, savings cooperatives, life insurance companies, pawnshops and credit fonciers. In addition, there are a number of specialized financial institutions, namely, the Government Savings Bank, the Bank of Agriculture and Agricultural Cooperatives (BAAC), the Industrial Finance Corporation of Thailand (IFCT), the Government Housing Bank, and the Export Import Bank of Thailand (EXIMBANK).

Within the organized financial markets, commercial banking is the most important institution in the Thai economy; it will likely maintain this position in the future.

With regard to the outstanding amounts of credit extended by the various institutions, commercial banks also pay the leading and most active role, accounting for 72 percent in 1992. Finance companies accounted for about 18 percent and the remaining 10 percent was shared by other institutions.




The Bank of Thailand was established in 1942 to act as the country' s central bank. Its function is to issue notes, act as banker to the government and other banks, act as fiscal agent of the government in its dealing with international monetary organizations, manage public debt, maintain exchange controls, supervise commercial banks and manage public credit fonciers.

As banker to the government, the Bank of Thailand holds the main accounts of the Government as well as those of government enterprises. It extends loans to the Government through the purchase of treasure bills and government bonds, and advises it regarding the formulation and implementation of monetary policy. The Bank of Thailand has three branches in the provinces---a southern branch at Songkhla, a northeastern branch at Khon Kaen, and a northern branch at Lampang.

Under the Commercial Banking Act of 1962 and its revision of 1979, the Bank of Thailand is entrusted with supervising the commercial banks and has the power to prescribe the cash reserve ratio, the maximum rates for loans and deposits, and the ratio of capital funds to risk assets. The Bank also acts as a lender of last resort for commercial banks by giving short-term loans against government securities and making available rediscount facilities. In 1979, a repurchase market was established whereby the Bank of Thailand bought and sold government bonds with an agreement to repurchase of resell. It is considered one of the best central banks in Asia.

As of 1993, there were 15 local commercial banks with 2,700 branches, including head offices: 757 in Bangkok and 1,943 in the provinces. In addition, there were 39 overseas branches of Thai banks, and 14 foreign banks (with 2 branches) registered abroad but operating in Thailand. The commercial banking network reaches practically every town in the country.

The commercial banks in Thailand had total assets of 2,746.9 billion baht of which more than 79 percent was in the form of bill, loans, and overdrafts. Commercial bank lendings are concentrated to a large extent on manufacturing (24.3 percent), wholesale and retail trade (17.9 percent) mostly in the form of working capital financing, and imports and exports (11 percent).

The commercial banks normally provide credit in the form of overdrafts which are on a short-term basis but may be rolled over on a year-to-year basis. Due to fluctuations in interest rates both in the international and domestic markets, commercial banks at present encourage customers to utilize term loans instead of overdrafts. Moreover, many commercial banks also provide guarantees for foreign and domestic loans, most of which are in the form of short and medium-term for local companies purchasing machinery and equipment from overseas manufacturers.

To further improve the role of commercial banks, the Commercial Banking Act of 1979 stipulated requirements for reducing the banks involvement in non-banking activities, encouraging lending to selected sectors and promotion a better relationship between the banks and their clients.

To promote Thailand as a regional financial centre, the Bank of Thailand implemented foreign exchange liberalization and in 1993 authorized 46 commercial banks to operate International Banking Facilities by providing loans in foreign currency to foreign and local borrowers. Of these, 20 banks were newly-established foreign banks in Thailand.

If you want to read some interesting topics, select the following information :

                        Bounty of the Land and 
                        Sea | Sector Performance 
                        | The Agriculture and 
                        Mining Sectors | Major 
                        Crops | Livestock 
                        | Forestry | Fisheries 
                        | Mining | The 
                        Manufacturing Sector | Tourism 
                        | The Organized Financial 
                        Market | The Bank 
                        of Thailand | Other Sources 
                        of Finance | The Capital 
                        Market | The Role of the 
                        Public Sector | Infrastructural 
                        Support | Public Utilities 
                        | Government Incentives 
                        and Financial Assistance | Foreign 
                        Trade and Balance of Payments | Conclusion 

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