An independent organisation should be established to supervise financial operations of savings cooperatives, as the Bank of Thailand is already tasked with several management duties, says the central bank governor.
Central bank chief Prasarn Trairatvorakul said he agreed with the move proposed by a committee overseeing economic, monetary and fiscal reforms under the National Reform Council to set up an independent agency to oversee savings cooperatives' financial management in an efficient manner.
"But establishing a new organisation is not easy and does not always ensure success. In the past 20 years, there have been good examples of setting up independent bodies, but others have not met expectations," he said.
The central bank cannot oversee the management of all the savings cooperatives, as there are 1,400 in total, of which 180 are considered major, Mr Prasarn said.
He said the State Enterprises Policy Commission assigned the central bank to supervise specialised financial institutions, but their number is much smaller than savings cooperatives.
Meanwhile, the central bank has been providing training support for both the Cooperative Promotion Department and the Cooperative Auditing Department to enhance the management skills of staff.
Earlier, Agriculture Minister Pitipong Phuengboon Na Ayudhaya said financial operations carried out by savings cooperatives and credit unions across Thailand were becoming more similar to those of formal financial institutions, so there was a need to ensure strict supervision and good governance for these non-bank financial institutions.
There are 8,161 cooperatives operating in the country with 11.3 million members, he said.
Cooperatives' total value circulating in the economy currently stands at 2.25 trillion baht or 16.5% of GDP.
Of the total, savings cooperatives account for 1.6 trillion baht, while 650 billion is from other types of cooperatives.
Regarding the recent Monetary Policy Committee decision to lower its policy interest rate by 25 basis points, the committee has not indicated whether the interest rate could be reduced further in the future, as committee members have assessed that an accommodative rate should be implemented to sustain recovery momentum, Mr Prasarn said.
Commercial banks have responded positively by reducing their interest rates, while monetary policy has limitations in terms of effects on the economy and appropriate timing for policy implementation, the central bank chief said.