Household Financial Services

(1)

Household

Financial Services

Products, Supervision & Consumer Protection

(2)

Financial Liabilities and Assets

of the Household Sector

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 1990 1992 1994 1996 1998 2000 2002 2004 1990 1992 1994 1996 1998 2000 2002 2004

Baht per household

Household Debt

Household Deposit

(3)

Financial Liabilities and Assets

of the Household Sector

0

20

40

60

80

100 Bank Loan

Equity

Bond

% of

GDP

77

67

46 2005

http://www.bot.or.th

(4)

Consumer Loans

0

200

400

600

800 1,000

1,200

Ju n-02 Dec-0 2 Ju n-03 Dec-0 3 Ju n-04 Dec-0 4 Ju n-05 Se p-05

Housing loans

Credit Card

Personal Loans

Billion Baht

Outstanding

-602

102

252 http://www.bot.or.th

(5)

0

200

400

600

800 1,000

1,200

Ju n-02 De c-02 Ju n-03 De c-03 Ju n-04 De c-04 Ju n-05 Se p-05

Housing loans

Credit Card

Personal Loans

Billion Baht

% growth (yoy)

Growth rate

-Credit Card

Personal Loan

Housing Loan

18.1

16.5

46.4 http://www.bot.or.th

Consumer Loans

(6)

Consumer Loans

Market Share

-Corporate

Loans

82%

Consumer Loans

18%

Housing

Loans

63%

Credit

Card

11%

Personal

Loans

26%

2005

http://www.bot.or.th

(7)

Household Financial Products

Capital market

Types of product

Regulator

Accessibility

Equity

Stocks

Warrants

Mutual fund units

Debt instruments

Bond

Debentures

SEC

No condition

SEC: The Office of Securities and Exchange Commission

(8)

Household Financial Products

Money and lending market

Types of product

Regulator

Accessibility

Deposit

Saving account

Current account

Fixed account

Promissory note

No condition

NCD

> 500,000 B

BOT

BOT: Bank of Thailand

(9)

Household Financial Products

Money and lending market

Types of product

Regulator

Accessibility

Loans

Housing loans

BOT

> 10 Mil.B,

no exceeding

70%

of

purchased price

Personal loans

BOT/

MOF

Credit line

< 5

times

Credit card

BOT/

MOF

> 15,000 B

per month or

180,000 B

per

year, credit line

< 5

times

BOT: Bank of Thailand MOF: Ministry of Finance

(10)

Household Financial Products

Money and lending market

Types of product

Regulator

Accessibility

Loans

Hire purchase

MOC/BOT

Bank: moveable properties

Others: all properties

Financial lease

BOT

_{Bank : moveable properties}

Others : all properties

MOC: Ministry of Commerce BOT: Bank of Thailand

(11)

Household Financial Products

Money and lending market

Types of product

Regulator

Accessibility

Phone banking

Internet banking

E-Money

BOT /

MOF

E-banking

Mobile banking

BOT

_{No condition}

BOT: Bank of Thailand MOF: Ministry of Finance

(12)

Household Financial Products

Money and lending market

Types of product

Regulator

Accessibility

Fund Manager

Private fund

Foreign Exchange

_BOT

BOT/

SEC

Local Currency

- Bring into Thailand without limit - Take out < 50,000 B

Foreign Currency

- Bring into Thailand without limit - Take out > 20,000

USD,

A group of 35 persons of fewer

http://www.bot.or.th

BOT: Bank of Thailand

(13)

Household Financial Products

Insurance

Types of product

Regulator

Accessibility

Life Insurance

Non-life Insurance

Department of

Insurance

No condition

http://www.bot.or.th

(14)

Consumer Protection

Capital market

Equity

Debt

z Set up Securities Investor Protection Fund

z File complaint to SEC (internet, mail, fax, phone)

z Transparent disclosure of the information and

possible risk to consumer

z Customer’s fund and assets must be segregated from

those of brokers

(15)

Consumer Protection

Money and lending market

Deposit

At current:

Full repayment of principal and interest

by Financial Institutions Development

Fund (FIDF)

In the future:

1. Deposit Insurance Agency to replace

FIDF

2. Partial guarantee to apply

(16)

Consumer Protection

Money and lending market

All

z Require financial institutions to establish and maintain

a clear procedure for handling customer complaints

z Promote information disclosure on terms and conditions

of financial services

z Give detail of the consumer loan contract

(17)

Consumer Protection

Money and lending market

Loans

Different guidelines

Personal loans

z Limit the ceiling of interest, penalty, fees, and other

charges no more than 28% per annum

Credit card

z Limit the ceiling of interest, penalty, fees, and other

charges no more than 18% per annum

z Limit fees and charges of cash withdrawn not

exceeding 3% of the drawn amount

(18)

Consumer Protection

Money and lending market

Loans

Common requirements

Personal loans

Credit card

z Disclosure of key information i.e. interest charges,

service fees and default rates

z

C

hanges of interest rate, fees and service charges

need approval

z Permission to charge actual but reasonable debt

collection expenses

z

Punishment for unrealistic advertisement

(19)

Consumer Protection

Money and lending market

E-banking

E-Money

z Comply with the guidelines for Security of

Electronic Services and Practicing Guidelines

for IT outsourcing

z Require financial institutions to be responsible

for fraud involving electronic fund transfer

z Comply with the principles of corporate

governance

(20)

Consumer Protection

Insurance

Life Insurance

Non-life Insurance

z Reserve requirement must be maintained

z Complaint channel at DOI

z Transparent disclosure of company’s financial

operation

z Clear detail of insurance policy

(21)

Consumer Protection

Consumer Card and Electronic Services Advice

-On fraud prevention

On fraud prevention

Operators should:

{

have resilient security and fraud management practices

{

arrange to have a regular audit trail process of

customer transactions

{

_{provide transaction log as reference}

{

_{continue monitoring development in technology and}

new form of fraud

{

establish contact channels to receive problem notices or

consumer complaints

(22)

Consumer Protection

Consumer Card Advice

-On card uses

On card uses

Cardholders should:

{

not let card out of sight

{

_{not recklessly discard receipts of card transaction}

{

check receipts against statement

{

report lost or stolen cards to card issuer immediately

{

not give card details through any suspicious channels

{

_{not write down or disclose card PIN}