ASEAN KEY DESTINATIONS
New bank head in Thailand
New Bank of Thailand (BoT) head Prasarn Trairatvorakul said a major task was to make sure Thai people can access financial resources and obtain reasonable loans.
Mr. Prasarn, president of Kasikornbank and chairman of Thai Banks Association, said this at a forum on “Business for Society, a National Reform Driving Force” held today by a local newspaper.
“As BoT governor, I also have the duty to ensure economic stability and overseeing financial institutions”, said Mr. Prasarn.
He said financial institutions must think of three sides—price, market mechanism and ethics.
Now, the question on whether the net interest margin (NIM) of commercial banks is too high is being raised, he noted.
“ Compared to the developed countries, the NIM in Thailand is higher, but it is lower than the underdeveloped nations. This is because the developed countries gain more income from fees on financial transactions that can compensate for the low NIM”, the banker told the Bangkok Post.
He said the NIM of each client group is also different. Commercial banks can earn quite low NIM from the major customer group due to fierce competition among banks, he explained.
The low credit clients, in the mean time, have to pay higher loan rates as they are considered to have greater financial risk. Therefore, the NIM of these clients is also high, he pointed out, he said.
In 2009, an average net interest margin of the commercial bank system was 3.2-3.3 percent, according to Mr. Prasarn.
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