Govt backs SFIF contribution cut

Govt backs SFIF contribution cut

The cabinet on Tuesday allowed specialised financial institutions to halve their contribution to the Specialised Financial Institution Development Fund (SFIF) to 0.125% of deposit base for two years, starting this year.

The contribution reduction is to help cut specialised financial institutions' costs to encourage them to pass on cost savings to assist virus-ravaged customers, GH Bank president Chatchai Sirilai said.

Four specialised financial institutions were taxed 0.25% of their deposits to contribute to the SFIF which will use such contributions to help four state banks that have financial problems. The four banks are GH Bank, Government Savings Bank, Export-Import Bank of Thailand and Islamic Bank of Thailand.

The central bank recently lowered the contribution of commercial banks to the Financial Institutions Development Fund from 0.46% of the deposit base to 0.23%, for two years. Mr Chatchai said his bank will slash its lending rates in the third quarter after the contribution reduction is published in the Royal Gazette.

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