The Bank of Thailand plans to issue comprehensive regulations later this year governing market conduct by financial institutions, including fines against violators and public disclosure of wrongdoing, says a senior Bank of Thailand official.
Ronadol: Seeking to prevent wrongdoing
The central bank is in the process of gathering information and will issue a notification on the regulations in late 2017, said Ronadol Numnonda, the central bank's assistant governor of the supervision group.
"The regulations will be the first comprehensive framework for regulating financial institutions on the matter and will help prevent persistent misconduct such as cross-selling and misinformation," Mr Ronadol said.
According to Article 39 of the Financial Institution Business Act, the Bank of Thailand has the power to issue notifications requiring financial institutions to comply with measures to protect consumers, and those who fail to follow them will be punished, including fines or license revocation.
But Mr Ronadol said no financial institution has ever been fined, nor has a business licence been revoked, due to misconduct.
He said the central bank is considering fines for financial institutions and public disclosure of wrongdoing to prevent repeat misconduct.
"We are finding a way to do it, like the SEC (Securities and Exchange Commission), but there are still some legal aspects that we need consider," Mr Ronadol said.
The regulations are one of the key areas of the central bank's three-year plan.
The Bank of Thailand formed its Financial Consumer Protection and Market Conduct Department last October to help create fairness and protect financial industry consumers.
He said the central bank will adopt a three-pronged approach to address the issue.
The three approaches are creating awareness among financial institutions on good market conduct; issuing regulations that are holistic, clear and easy to enforce; and improving public understanding of financial products and consumer rights.
Starting last December, the central bank, after conducting a secret survey, found that more than 90% of the 143 bank branches surveyed nationwide had committed at least one breach of the Bank of Thailand's standards.
In 2016, the Bank of Thailand's Financial Consumer Protection Center received 1,588 complaints regarding financial products and services, down 20% from 1,989 in 2015.