21 July 2024

The state-owned Bank of Agriculture and Agricultural Cooperatives (BAAC) has surplus liquidity of about 30 billion baht and it may have to sell off some of its current assets to raise an additional 300 billion baht to meet other commitments and the government borrowing requirement of 172.3 billion baht, to fund the 500-billion baht digital wallet scheme, according to Move Forward Party’s deputy leader, Sirikanya Tansakul.

In addition to the 172.3 billion baht borrowed from the BAAC, 175 billion baht will be allocated from the current fiscal year’s budget and the rest from next.

She disclosed today that the BACC board has not yet discussed the government’s borrowing plan, because it is still waiting for details from the government, adding that this also means that the Council of State has not yet ruled on whether government’s planned borrowing from the BAAC is in line with the objectives of the bank not.

The scheme, which is the flagship policy of the ruling  Pheu Thai party, is still pending with the House budget scrutiny committee, because the Finance Ministry has provided it with any details about the scheme, other than a single page stating the budget required.

Sirikanya said that the BAAC may have to issue bonds in the capital market to raise funding for the scheme.

She disclosed that the government still owes BAAC about 800 billion baht in accumulated borrowing by previous governments and the government is still repaying the bank in annual instalments.

She said that the government must make clear how much it can repay each year, so the bank is able to conduct manage its finances effectively, adding that, even though BAAC is a state-owned bank, it needs to have financial stability to a certain level so it does need to raise funding though the capital markets.

The Move Forward party-list MP admitted that, at this stage, it is still unclear whether it will be in October, November or December that the 10,000 baht cash state benefit, promised by the government to the Thai people, will be disbursed.

Nevertheless, she said she wishes to see the disbursement within the fourth quarter of this year.