On March 8 2001, the Bank of Thailand, by virtue of section 9 bis of the Commercial Banking Act BE 2505 (1962), issued Letter No Tor Por Tor Sor Nor Sor (11) Wor 514/2544 on Permission for Commercial Banks to Undertake Escrow Accounts Business. This permits a commercial bank to render escrow account services to clients who have entered into either a buy and sell agreement, or sale agreement of various properties with the seller; the commercial bank will allow the withdrawal of money from the said account only if the purchaser and seller have fulfilled the terms and conditions as set out in the escrow account agreement.
Under the Letter, the commercial bank must comply with the following:
- the commercial bank can collect escrow account fees, service fees and other expenses from the user of the service if such fees or expenses are expressly specified in the agreement; and
- the escrow account agreement must, at a minimum, contain the following information: name and address of the parties; details of the properties that are the subject matter of the agreement; rules, procedures, and conditions for opening the account, making a deposit, and withdrawal and closing of the account; expenses and fees for opening the escrow account; and start date and closing date of the escrow account.
For any other businesses not falling within these rules, the commercial bank must obtain a prior approval from the Bank of Thailand under section 9 bis of the Commercial Banking Act BE 2505 (1962) and amendment thereof; otherwise, the Bank of Thailand may withdraw the permission for the undertaking of escrow account business as stated above.