TOURISM
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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.
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THE ORGANIZED
FINANCIAL MARKET
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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.
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THE BANK OF THAILAND
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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.
