RICE PLEDGING SCHEME
The Bank for Agriculture and Agricultural Cooperatives (BAAC) will probably need to borrow money without the Finance Ministry's guarantee to fund the 270-billion-baht budget set for the state's rice-pledging scheme for the current harvest year, says a senior official at the bank.
As the law restricts the Finance Ministry from providing loan guarantees to state-owned banks for more than six times its capital fund, or around 600 billion baht, the BAAC will be unable to use the guarantee for this harvest year, as guaranteed borrowing has almost reached its limit, said president Luck Wajananawat.
Borrowing without the ministry's guarantee typically carries a higher interest rate and also requires a cabinet resolution.
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