Cabinet allows BAAC B6bn more in capital
The cabinet approved a proposal on Tuesday from the Bank for Agriculture and Agricultural Cooperatives (BAAC) to raise registered capital by 6 billion baht this year.
Rachada Dhnadirek, a government spokeswoman, said the BAAC's new capital will be available from the Specialized Financial Institutions Fund (SFIF), to which all SFIs make contributions based on their deposits.
After the cabinet's approval, the BAAC will see registered capital rise to 62 billion baht.
On Jan 21 this year, the cabinet approved the BAAC's five-year capital increase plan, allowing it to increase authorised capital by a total of 20 billion baht until 2024. From 2021 to 2024, the bank's registered capital will be increased by 3.5 billion baht a year.
The capital injection will allow BAAC to offer more loans, notably for smart farming, small and medium-sized enterprises (SMEs), community businesses, Village Funds, agricultural cooperatives and to support government policies and projects aimed at reducing income disparity.
Once the registered capital increase is complete, the bank aims to extend 101 billion baht in loans this year.
Some 50 billion baht of the total will be offered to seven programmes including a smart farming project; farmers affected by drought; loans to build additional water resources for agricultural purposes to deal with drought; and an upgrade of agricultural cooperatives. Other areas of focus are lending to community businesses and shops, and SMEs that have the potential to upgrade their businesses.
The BAAC's capital adequacy ratio is relatively high at 11.9%, well above the Bank of Thailand's minimum requirement of 8.5%.