BANGKOK, 17 February 2014 (NNT) – Customers of the Government Savings Bank (GSB) have flocked to nearest branches to close their accounts after the bank began giving loans to the Bank for Agriculture and Agricultural Cooperatives (BAAC) for unknown purposes, forcing the GSB to stall the lending process.
In the wake of the GSB’s announcement that it had decided to provide a 20-billion-baht inter-bank loan to the BAAC, GSB President Worawit Chailimpamontri admitted that the decision had severely impacted customers’ confidence. Throughout today, the first day since the news was broken, throngs of depositors terminated their accounts, causing at least 30 billion baht to be withdrawn from GSB branches across the country.
Many branches reportedly ran out of cash and had to issue cashier’s checks for the departing customers. As the trend of withdrawals was expected to continue in the days to come, Mr Worawit said he had instructed all branches to reserve enough cash.
According to the GSB President, most of the people closing their accounts were in Bangkok and its vicinities as well as the southern region. He revealed that there were many large amount customers, with a combined deposit of tens of billions of baht, who were contemplating to retrieve their money as well.
Out of the total loan of 20 billion baht, Mr Worawit disclosed that 5 billion baht had been paid out. However, as a consequence of today’s massive withdrawals, he said the GSB had ordered to have the remaining 15 billion baht withheld in a bid to shore up the confidence of depositors. Should the money given to the BAAC be used to pay farmers in the rice pledging scheme as feared, he insisted that the loan agreement would be canceled immediately.
