For the first time in 20 years, new foreign banks have been awarded full branch status in Thailand. Formerly, only 14 foreign banks were permitted to have branches in Thailand, including the Bank of America, Bank of Tokyo, Banque Indosuez, Chase Manhattan Bank, Citibank, Deutsche Bank, Hongkong & Shanghai Bank, Sakura Bank and the Standard Chartered Bank, among others. On November 7 1996, the Finance Ministry granted full-branch licences to seven new foreign banks, selected by the Bank of Thailand on the basis of the amount of trade with each bank's country base, to upgrade their offshore banking units.
The seven banks are: Canada-based Bank of Nova Scotia, Germany's Dresdner Bank, French Banque Nationale de Paris, Japan's Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Sumitomo Bank, and the Bank of China.
It is hoped that the new bank branches, expected to concentrate on retail banking, will use Thailand as a centre to expand their business to Indochina, as well as help expand business opportunities between Thailand and their home countries. They are also expected to help develop the local money market and transfer new technology to Thailand. The main problem facing the new banks is expected to be the shortage of personnel.
The upgrading of Bangkok International Banking Facilities (IBF) offices to full branches is another step toward liberalization of the financial sector. The seven branches are expected to begin operating in 1997, bringing the total number of foreign banks in Thailand to 21. In addition, at least seven new IBF operators are expected to receive Ministry of Finance approval in 1997, which would bring the number of international banking facilities offices to 45.