GSB customers protest by withdrawing money

18 กุมภาพันธ์ 2557

Faced with a large withdrawal of customer deposits yesterday, the Government Savings Bank (GSB) has decided to suspend further lending to the Bank for Agriculture and Agricultural Cooperatives (BAAC).

Faced with a large withdrawal of customer deposits yesterday, the Government Savings Bank (GSB) has decided to suspend further lending to the Bank for Agriculture and Agricultural Cooperatives (BAAC).

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Customers storm into the Hat Yai branch of the Government Savings Bank in Songkhla to withdraw cash on Monday. Wealthier people taking out large sums left with cash in their bags while those withdrawing small amounts got cheques. VICHAYANT BOONCHOTE

14:00

There are reports of several large deposits at GSB branches today, but heavy withdrawals also continue. It will be interesting to see if there is another deficit for the day or if the day ends with a surplus.

12:30

GSB staff are reported to be rallying at bank headquarters and calling for the resignation of bank president Worawit Chailimpamontri.

GSB stunned by B30bn deposit run

Clients pull cash amid rice-pledge suspicion

POST REPORTERS

The Government Savings Bank (GSB) has decided to suspend further lending to the Bank for Agriculture and Agricultural Cooperatives (BAAC) after experiencing a 30-billion-baht deposit run amid concerns the loan is being used to pay for the loss-ridden rice-pledging scheme.

"The GSB board will discuss the matter [today] as the issue affects the bank," president Worawit Chailimpamontri said yesterday.

He assured that the GSB would not lend more money to the BAAC and said the BAAC should return the 5-billion-baht loan that the GSB has already transferred to it if it did not use the money.

Government Savings Bank president Worawit Chailimpamontri said yesterday that the GSB would not lend more money to the Bank for Agriculture and Agricultural Cooperatives (BAAC). TAWEECHAI TAWATPAKORN

Customers yesterday withdrew 30 billion baht from GSB branches nationwide against new deposits of 10 billion baht.

The 20-billion-baht deficit is unusually high after an extended weekend when normally only about 7 billion baht would be withdrawn.

According to Mr Worawit, most withdrawals happened in Bangkok, nearby provinces and southern provinces. Deposits in greater Bangkok form up to 40% of total deposits at the GSB.

Mr Worawit admitted that clients in Bangkok were sensitive to the reports relating to the rice-pledging scheme and most customers who withdrew the money were small-scale clients.

Mr Worawit said each GSB branch increased cash levels to cope with the massive withdrawals.

"We did not underestimate the situation but we may have wrongly estimated the impacts because we did not expect online speculation would have a real effect on the bank," Mr Worawit said.

Cash withdrawal problems happened mainly at GSB branches in department stores, which do not have vaults to keep large sums of cash.

He also explained that the 5-billion-baht loan to the BAAC was a normal inter-bank transaction and the GSB did not know how the BAAC would spend the sum.

He stressed that the GSB was guaranteed by the government.

Last year, its excess liquidity amounted to 200 billion baht, accounting for 20% of its total deposits, while the Bank of Thailand requires only 6%.

Non-performing loans at the GSB formed only 1.14% and it posted a net profit of 22 billion baht last year.

A large number of clients yesterday withdrew their savings and closed their accounts with the GSB in protest against the government's plan to use depositors’ money to pay for its pledged rice.

The government has defaulted on about 1 million farmers who have pledged their rice with the government for several months and the outstanding sum stands at 130 billion baht.