BoT encourages financial institution merger

BANGKOK, April 23 (TNA) -- The Governor of the Bank of Thailand (BoT) Veerathai Santiprabhob supported the recent cabinet's decision to approve tax incentives to promote mergers among local banks to significantly improve their competitiveness both at the regional and global level. The plan was conceived by the Ministry of Finance and cabinet approval was received to allow the tax incentives to last up to December 2022. Mr Veerathai stated that the policy was strictly on a voluntary basis and no official pressure was being put on financial institutions to comply. He said that local banks would benefit from significantly improved competitiveness, lower operational costs and higher immunity to risks if they were able to increase in size. At present, local banks were comparatively small and many have foreign shareholders. Mr Veerathai also clarified that the deadline of December 2022 was set to encourage local banks, some of whom may be inclined to drag their feet thereby losing a great opportunity. The governor said the BoT could not accurately estimate how many banks will be left after the mergers as in the end market mechanisms will determine population numbers. He, however, stated that banks should take advantage of this opportunity to guarantee their futures while at the same time make significant savings from the tax breaks. (TNA)