Government Savings Bank (GSB) president and chief executive Worawit Chailimpamontri on Monday admitted that the bank is experiencing an unusual rate of cash withdrawals following its decision to indirectly loan funds to pay farmers owed money under the rice-pledging scheme.
Customers withdraw money at Government Savings Bank's Uruphong branch on Monday after the bank decided to give an inter-bank loan to the Bank of Agriculture and Agricultural Cooperatives to help the caretaker government pay farmers. (Photo by Weerawong Wongpreedee)
The GSB chief on Sunday confirmed a five billion baht loan to the Bank for Agriculture and Agricultural Cooperatives (BAAC) to make overdue payments to rice farmers under the rice-pledging scheme. But he said the bank could reconsider the loan if the deal caused public uproar or customers withdrew money from GSB. Both banks are state-owned.
Mr Worawit on Monday linked cash withdrawals from several branches to the inter-bank loan to BAAC, insisting that the credit would be used to shore up the BAAC's liquidity for no more than 30 days.
He said 30 billion baht was withdrawn from all GSB branches on Monday while 10 million baht was deposited.
''All bank managers have been directed to explain to customers that the bank has no involvement in the rice-pledging scheme as reported,'' Daily News Online quoted him as saying.
All branches were ordered to double their cash reserves to cope with the large quantities of money withdrawn by clients, he added.
People wait to withdraw cash at GSB bank in Trang's Muang district, in protest against the bank's loan to the BAAC. (Photo by Methee Muangkaew)
But the GSB labour union, led by Likit Klinthanom, has already warned consumers that money from GSB is being channelled to the BAAC to pay farmers.
More than one million farmers are yet to receive rice payments after pledging produce to the government subsidy scheme.
Farmers affected by the delays are now rallying in Bangkok, calling on caretaker Prime Minister Yingluck Shinawatra to find the money to pay them.
Many GSB branches, particularly in the southern region, were busier than usual on Monday morning after customers took their deposits out of the bank in protest against the loan.
''I came here to close my account and deposit more than 100,000 baht in another bank because GSB loaned BAAC money to solve the rice problem,'' Noi Wichaidit, 52, said at a branch in Satun's Muang district. Other neighbours were doing the same, she added.
Satun branch manager Kittisak Jaturaksamai said an unusually large number of customers had come into the bank on Monday and warned that "99 per cent" wanted to take out cash. Branches in La Ngu and Tha Phae districts were encountering the same problem, he added.
Aphaporn Rattanakotch, the GSB director responsible for branches across Trang and Satun, admitted concern over the situation but assured customers that all branches have sufficient cash to provide normal services to customers. The branches will evaluate the situation day-by-day, she added.
A number of branches in Bangkok also reported a spike in withdrawals, but bank branches in provinces including Rayong and Yala said it was business as usual.