The chairman of the House committee on Border Affairs on Wednesday afternoon insisted the financial status of the Islamic Bank of Thailand (IBank) was still strong and that it would not fail as speculated.
Panel chairman Samart Maluleem of the Democrat Party called an urgent news conference after it was reported that more than five billion baht in cash had been withdrawn by the bank's clients over the past 15 days.
The rush was driven by a report that IBank faces a problem, with as much as 24 billion baht of non-performing loans (NPLs), and would merge with another state-owned bank.
IBank’s senior executive vice president Rak Vorrakitpokatorn was also at the press conference.
Islamic Bank of Thailand (IBank) in Narathiwat province (Photo by Jetjaras Na Ranong)
Mr Samart said IBank’s customers had no need to panic. The bank is 100% owned by the government and would continue to provide financial services as usual.
He said a rush on withdrawals would yield more negative results than positive ones.
Mr Rak assured clients that his bank is still strong and would not collapse.
He said the bank would separate its NPLs into two baskets and the bad debts would be restructured by six billion baht a year.
The bank vice president expressed confidence that about 50% of the NPLs could be restructured as planned, while the remaining 50% would be settled through discussions with debtors on extending lending terms to ease the repayment burden.
Mr Rak said there were no problems for clients who have deposit accounts with IBank.