Thrift and credit cooperatives are opposed to the Finance Ministry's proposal to take over the Agriculture and Cooperatives Ministry's tasks of regulating and supervising them for fear of tougher supervision, according to an informed source at the Finance Ministry.
The Finance Ministry initiated a plan to regulate thrift and credit cooperatives as well as cooperative credit unions after Klongchan Credit Union Cooperative reported embezzlement worth billions of baht, endangering thousands of retail deposits as there is no law to protect their money.
The size of thrift and credit cooperatives and cooperative credit unions are increasing, and the Finance Ministry is worried embezzlement could be repeated in the future without appropriate regulations and stricter controls, the source said.
The ministry is especially concerned with large thrifts and credit cooperatives and cooperative credit unions, the source said.
There are around 200 thrift and credit cooperatives with capital of more than 2 billion baht and 100 cooperative credit unions with capital of more than 5 billion baht.
The Agriculture and Cooperatives Ministry reports that as of Jan 1 last year, there were 8,173 cooperatives in the country, with 7,165 operational. There are 1,412 thrift and credit cooperatives, with 1,387 still functioning.
The thrift and credit cooperatives may be concerned they will find it harder to lend with stricter measures under the Finance Ministry, said the source.
To regulate thrifts and credit cooperatives and cooperative credit unions, the Finance Ministry will focus on capital adequacy ratio to risk-weighted assets, financial liquidity and lending criteria, the source said. The ministry could also use requirements for specialised financial institutions that call for maintaining minimum financial liquidity at 6% of total deposits.
The regulations for thrifts and credit cooperatives and cooperative credit unions should not be applied to commercial banks as the former are required to provide some societal benefit.
Krisada Chinavicharana, director-general of the Fiscal Policy Office, admitted thrifts and credit cooperatives were concerned about the potential change, but the Finance Ministry is more concerned with creating a regulatory criteria to prevent risks rather than whether it has supervision of the cooperatives.
In related news, Mr Krisada said the government gathered 1.97 trillion baht from October to July, exceeding its target by almost 5% and rising 11.1% from the same period last year.
The increase was attributed to revenue worth 56.3 billion baht derived from the recent 900- and 1800-megahertz spectrum licence auctions.
With the higher than expected revenue collection, the Finance Ministry expects to achieve this fiscal year's revenue target of 2.33 trillion baht, he said.