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  1. #1
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    Bank of Thailand & Bangkok Bank, new regulations

    Just received from the chamber of Commerce,

    it is a bit long, but well, it's their new rules...

    money transfers and so on... Here we Go :



    Bangkok Bank's Global Payment Services Newsflash


    Bangkok Bank has issued several updates on the Bank of Thailand's (BOT)
    reserve requirement on short-term capital inflows since December 18, 2006.


    We are pleased to summarize all the related issues and the impact on the
    operation of your THB account with us as of December 29, 2006 in this
    newsflash and also attach a list of frequently asked questions which we
    hope will help you better understand the BOT regulations.

    Please disregard all the previous issues and refer to this issue for your
    reference.

    1. Reserve Requirement on Short Term Capital Inflows

    In order to curb short-term capital inflows and limit Thai Baht speculation,
    the BOT announced on December 18, 2006 that all financial institutions in
    Thailand must withhold 30% of all foreign currencies which are brought into
    Thailand and converted into Thai Baht and remit the required reserves in
    foreign currencies to the BOT. After one year, customers whose foreign
    currencies have been withheld can request for refunds without interest by
    submitting related evidence to prove that the funds have been in Thailand
    for at least one year. Should any customers wish to repatriate their funds
    earlier than one year, they would be refunded only two-thirds of the amount.


    Relaxation Procedures

    On December 19, 2006, the BOT relaxed the reserve requirement to exclude
    investment in the equities markets and foreign direct investment after a
    sharp sell-off in the Thai stock market.

    The BOT made further clarifications on December 22, 2006 on what is or is
    not exempted from the reserve requirement ruling as follows:

    Exemptions:

    Foreign currencies sold to commercial banks in Thailand in exchange for THB
    for the following transactions are exempt from the 30 percent foreign
    currency reserve requirement:

    a. Foreign exchange transactions related to current account activities
    including transactions related to exchange of goods, services, income,
    transfers and aid.

    b. Inflows for equity investment in companies listed in the Stock Exchange
    of Thailand and Market for Alternative Investment (excluding mutual funds
    and warrants), investment in the Thai Futures Exchange (TFEX), and
    investment in the Agricultural Futures Exchange of Thailand (AFET).

    c. Foreign direct investment defined as investments by non-residents in
    resident entities where the investor owns at least 10 percent of the equity
    capital and has managerial power.

    d. Investment in real estate such as land and condominiums (excluding real
    estate mutual funds).

    e. Foreign currency borrowings transacted prior to 19 December 2006.

    f. Currency swap transactions associated with rolling over existing exchange
    rate hedging contracts with the original financial institution.

    g. Foreign currencies sold in exchange for THB amounting to less than 20,000
    US dollar or equivalent.

    h. Foreign exchange sold in exchange for THB by clients or authorized
    money changers in the form of travellers' cheques and bank notes.

    j. Foreign currencies sold in exchange for THB by (a) foreign embassies,
    foreign consulates, specialized agencies of the United Nations,
    international organizations/ institutions incorporated in Thailand; and (b)
    Thai embassies, Thai consulates or other Thai government entities located
    outside Thailand.

    k. Foreign currency borrowings of government entities.

    Non-exemptions:

    Foreign currencies sold to commercial banks in Thailand in exchange for THB
    for the following transactions are subject to the 30 percent foreign
    currency reserve requirement:

    a. Investments in debt securities transacted from 19 December 2006 onwards.

    b. Foreign currency borrowings transacted from 19 December 2006 onwards.

    c. Foreign currencies sold in exchange for THB for purposes other than
    those exempted above.

    Impact of the Reserve Requirement on the Operation of THB account

    The reserve requirement will apply when your institution ( non-resident THB
    account holder ) sells foreign currencies in exchange for THB with
    commercial banks in Thailand. This rule does not apply to your THB/FX
    transaction done with banks outside Thailand. Your institution can buy THB
    from banks outside Thailand, and can sell THB against foreign currencies
    with banks in Thailand without any restriction.

    2. Other related rules on non-resident THB accounts

    Along with the reserve requirement, the BOT also required financial
    institutions in Thailand to observe the following rules related to the
    operation of non-resident THB accounts:

    2.1. Deposits from Resident account to Non-resident Account

    Any THB deposits into Non-Resident THB Accounts by a resident (individuals
    or companies registered in Thailand) for the settlement of goods, payment of
    service fees or overseas investment to be evidenced by satisfactory
    supporting documents in compliance with the Bank of Thailand are to be
    converted into foreign currency and remitted out on the same day.

    Impact of the Deposits from Resident account to non-resident account rule on
    the Operation of your THB account

    The above rule will impact your non-resident THB account only when your
    institution expects a resident (individual or company registered in
    Thailand) to pay to your non-resident THB account with Bangkok Bank for the
    settlement of goods, payment of service fees or overseas investment. In such
    cases, we need to receive your instruction to convert the THB funds
    received from a resident account into foreign currency on the same day
    before we can accept such funds into your non-resident THB account.

    The rule also applies when you send Bangkok Bank checks issued by Thai
    residents for collection. Previously, we were able to deposit proceeds of
    such checks accompanied by supporting documents evidencing the source of
    funds into your non-resident THB account after funds were confirmed
    cleared. We are now required to convert THB proceeds of these checks and
    remit to the sending bank in foreign currencies.

    Please note that this rule has no impact on:

    a) transfers from your non-resident THB account to another non-resident
    THB account or vice versa.

    For example:

    When your bank (a non-resident THB account) send us MT202 payment in THB to
    pay to the account of another non-resident THB account (account of another
    foreign financial institutions) with Bangkok Bank or with another bank in
    Thailand, this rule does not apply.

    b) transfers from your non-resident THB account to a resident THB account.

    For example:

    When your bank send us MT103 instructions in THB to debit your account and
    pay to beneficiary's accounts (Thai individuals or companies registered in
    Thailand) with Bangkok Bank or with another bank in Thailand, this rule
    does not apply.

    c) receipts of funds from a non-resident THB account to your non-resident
    THB account with Bangkok Bank or vice versa.

    2. 2. Limit on Day-end Credit balance on Non-resident THB Account

    The Bank of Thailand (BOT) will allow day-end credit balances of
    non-resident THB accounts to exceed THB 300 million until January 8, 2007
    only.

    Impact of the Day-end Credit balance limit on the Operation of your THB
    account

    After January 8, 2007, your institution is required to ensure that the
    day-end credit balances in all the non-resident THB accounts with all
    commercial banks in Thailand do not exceed THB 300 million. (This includes
    all non-resident THB accounts of all types i.e. current accounts, savings
    accounts and fixed accounts of one non-resident entity in each location. For
    example, all non-resident accounts of ABC Bank, Singapore with all
    commercial banks in Thailand is counted as one non-resident entity, ABC
    Bank, Hong Kong is considered as another non-resident entity). Otherwise,
    the Bank of Thailand may require your institution to sell THB against
    foreign currency at a penalty rate to be determined by the BOT on a case by
    case basis.

    3. Procedures for foreign investors who wish to buy THB against foreign
    currencies to invest in Thailand's equities markets

    Although the BOT exempted foreign investment in the Thai equities markets
    from the 30% reserve requirement, it required that funds destined for the
    equities markets should be deposited in the Special Non-resident Baht
    Account for Securities( SNS) to be opened with custodian banks in Thailand.

    On December 22, the BOT announced the procedures for commercial banks in
    Thailand on how to handle foreign investment into the Thai equities markets
    as follows:

    a. Commercial banks in Thailand, which sell THB against foreign currencies
    to non-residents for equity investment in companies listed in the Stock
    Exchange of Thailand and Market for Alternative Investment (excluding mutual
    funds and warrants), investment in the Thai Futures Exchange (TFEX), and
    investment in the Agricultural Futures Exchange of Thailand (AFET), must
    deposit those THB funds into SNS accounts before making payment for such
    equity investments.

    b. Commercial banks must deposit sale proceeds of the above equity
    investments of non-residents into the SNS accounts only. These sale proceeds
    can either be converted and remitted into foreign currencies or be used for
    reinvestment in the equity market as listed above only. Funds in the SNS
    account cannot be used to pay for other type of investments or
    transferred to other non-resident THB accounts.

    c.. Commercial banks in Thailand must arrange for non-residents, who wish
    to transfer THB from their non-resident THB account to SNS accounts for
    equity investment without being subject to the 30% reserve requirement, to
    transfer THB funds into SNS accounts before January 8, 2007.

    d. From 8 January 2007 onwards, balances in the SNS accounts shall not
    exceed 300 million baht. The BOT will continue to review the
    appropriateness of this limit. (This day-end limit on credit balance for SNS
    account does not include the day-end limit on credit balance for
    non-resident THB account)

    Impact of the SNS account

    These rules will concern clients who invest in Thailand's equities markets
    only. We suggest that clients who invest in the Thai equities markets
    contact their custodian banks in Thailand to confirm details of the above
    arrangements for SNS accounts.

    We will continue to send updates to our clients when new information becomes
    available and wish our Thai Baht clearing clients a very Happy New Year.

    For any further clarification on the above, please contact our Relationship
    Management Unit at telephone number (662) 685 7276, 685 7289 and 685 7290 or
    email: relationship.mgt@bbl.co.th


    Relationship Management

    Global Payment Services Dept.

    December 29, 2006


    <<FAQ-Reserve Requirement.doc>>


    This email message is intended for the exclusive use of Bangkok Bank's
    clients only. All information is believed to be accurate, but Bangkok Bank
    makes no representation or warranty to any person as to the accuracy or
    completeness of the material contained and enclosed herein. Unless
    specifically indicated, this email does not constitute formal advice or
    commitment by the sender or Bangkok Bank

  2. #2
    RDN
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    I just made a S.W.I.F.T. transfer from the UK to my current account (Krung Thai bank) of more than the "limit" of $20,000 US or equivalent, and it came through with no problems. And I got a rate of nearly 71 baht to the GBP.
    Last edited by RDN; 08-01-2007 at 09:30 PM.

  3. #3
    ding ding ding
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    ^ the members here would love to join you in your celebration. perhaps you can throw a TD party in Phuket....at your expense

  4. #4
    RDN
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    Quote Originally Posted by Helicopter View Post
    ^ the members here would love to join you in your celebration. perhaps you can throw a TD party in Phuket....at your expense
    Heh, heh! That money's got to last me a whole year! Well, it doesn't have to, but I'll try to eke out a life on it...

  5. #5
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    Interesting. Ms. AC went to the local Bangkok Bank branch last week and specifically asked about transferring money to purchase property. She was told that the 30&#37; withholding would still apply. She's now printed out the article in the OP and will ask again.

  6. #6
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    Thats great RDN, unless they change the rules again and won't give you any til next year, I bring in about what it takes to keep going, and enough that I have no trouble renewing my retirement visa,, nothing more, anytime I need more than we have in SCB I just stick in my US ATM card, don't cost anymore than when the bank does it, which is 3&#37; foreign currency charge.
    I lived in Mexico a few years ago [well more than 10] when they devalued the peso, folks with big hunks in the banks couldn't even spend the interest, went to bed one nite with not a worry in the world and woke up next morning without enough in the bank to buy a cup of coffee..

  7. #7
    ding ding ding
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    ^ thats starbucks for you

  8. #8
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    Quote Originally Posted by blackgang
    anytime I need more than we have in SCB I just stick in my US ATM card, don't cost anymore than when the bank does it, which is 3&#37; foreign currency charge.
    There are still banks out there that don't have any foreign currency charge for ATM withdrawals.

    Bank of Internet

  9. #9
    RDN
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    Quote Originally Posted by blackgang View Post
    Thats great RDN, unless they change the rules again and won't give you any til next year, I bring in about what it takes to keep going, and enough that I have no trouble renewing my retirement visa
    Yes, that's what it's for, and a bit more. I transferred it 3 months earlier this year as there's a lot of talk on other forums about needing the money (800,000 baht) in the bank for 3 months before you apply for the extension.


    Quote Originally Posted by blackgang View Post
    ,, nothing more, anytime I need more than we have in SCB I just stick in my US ATM card, don't cost anymore than when the bank does it, which is 3% foreign currency charge.
    I used to use my UK "Nationwide" ATM card (which charges 0.00%) in Thai ATMs, but now I have the Thai bank ATM I don't bother.

    The charge for transferring using S.W.I.F.T. is about 1,400 baht (20 in UK), so that works out at about 0.14% for a big sum.

    Quote Originally Posted by blackgang View Post
    I lived in Mexico a few years ago [well more than 10] when they devalued the peso, folks with big hunks in the banks couldn't even spend the interest, went to bed one nite with not a worry in the world and woke up next morning without enough in the bank to buy a cup of coffee..
    A good reason to keep the minimum necessary over here!


    Quote Originally Posted by Anonymous Coward View Post
    There are still banks out there that don't have any foreign currency charge for ATM withdrawals.

    Bank of Internet
    And the good old Nationwide. (If you're British ) What I don't understand is: if the Nationwide can do it, why can't the other banks/building societies?

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