Plans by the Bank of Agriculture and Agricultural Cooperatives (BAAC) to increase its registered capital by 20% to 60 billion baht received cabinet approval yesterday.
The BAAC said the increased capital will allow it to extend more loans to farmers.
It plans to lend 500 billion baht over the next five years for lending growth of 10% a year.
The bank's capital adequacy ratio (CAR) is expected to stand at more than 10% in each of the next three years on participation in the government's debt moratorium scheme for customers with personal debt of 500,000 baht each.
The BAAC remains worried the scheme will increase its financial burden.
In 2011, its CAR stood at 10.4%, reflecting a good performance, while it fell to 9.85% as of Oct 31 this year when it began the debt moratorium scheme.
The BAAC estimates the 2.94 million farmers who joined the debt moratorium scheme with combined outstanding debt of 396 billion baht will see its annual revenue decline by 4.8 billion baht.
It said improved performance will see non-performing loans decline to 3.98% in 2016 from 5% this year.
Net profit is estimated at 4.5 billion baht this year, rising to 6.9 billion in 2016.
The BAAC also conducted research into the government's price intervention scheme for crops from this past June 30, which was the end of the first quarter of its fiscal 2012.
Deputy government spokesman Parkdehans Himathongkom said the BAAC also detailed the two accounts to the cabinet _ the regular operations and the financial projects required to serve government policy.
In the first quarter of fiscal 2012, the bank's regular operations showed a net profit of 3.8 billion baht on revenue of 11.98 billion and expenditures of 8.18 billion.
But the account for government schemes showed a new loss of 1.18 billion baht on revenue of 3.56 billion and expenditures of 4.75 billion.