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Tax on bank deposit holdings to rise


The tax on banks' total deposit holdings will increase from 0.4% to 0.47% from July 31, Deputy Prime Minister Kittiratt Na-Ranong said on Monday.

The decision was announced after a meeting of senior officials of the Finance Ministry, the Bank of Thailand and the Thai Bankers' Association on Monday morning.

Mr Kittiratt said 0.46 per cent of the surcharge will be used to repay the Financial Institutions Development Fund's 1.14 trillion baht debt stemming from the 1997 economic crisis, and the remaining 0.01 per cent will be contributed to the Deposit Protection Agency.

"I don't care about the amount of time we'll take to repay the remaining debt, given the new rate, but I believe that we can pay all the interest burden within the first year and that we'll have some money left for paying down the principal," he said.

Mr Kittiratt said the meeting resolved that the state banks' contribution to the National Development Fund also must be equal to the surcharges on commercial banks at 0.47 per cent, to reduce the gap between the two sectors.

The minister said BoT governor Prasarn Trairatvorakul will look into ways to increase the current insurance coverage on customers' bank accounts which is limited to 1 million baht per depositor. This is too small, he said. The new protection programme will be effective from August.

According to the Bank of Thailand, 98.7 per cent of Thailand's 79 million deposit accounts have balances of less than one million baht, pointing to a huge disparity in wealth distribution.

The government last month issued four executive decrees to transfer 1.14 trillion baht in debt from the 1997 crisis to the FIDF, which is under the central bank. The aim is to reduce visible public debt and to seek loans amounting to 350 billion baht for water management programmes and flood restoration and rehabilitation and set up a 50 billion baht fund to offer flood insurance for domestic investors. It also amended BoT regulations to enable it to extend 300 billion baht in soft loans to financial institutions.

The opposition Democrat Party and a group of senators later filed petitions with the Constitution Court to rule whether two of the financial decrees were in violation of Article 184 of the consitution as there is no emergency which requires they be issued.

The first decree allows the government to transfer full responsibility for repayment of the 1.14 trillion baht in debt and the other allows the government to seek loans amounting to 350 billion baht for water management programmes.

The court has accepted the petitions.

(Source: Bangkok Post, Tax on bank deposit holdings to rise, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong, 13/02/2012, Online Reporters, link)

Banking Vocabulary

central bank - the institution that controls the supply of money in a country and provides financial services to the government and other banks (See Wikipedia)

holdings - things that you own
bank deposit holdings - the amount of bank deposits that a bank has
banks' total deposit holdings -
the amount of bank deposits that a bank has

Tax on bank deposit holdings to rise

The tax on banks' total deposit holdings will increase from 0.4% to 0.47% from July 31

debt
- an amount of money that you owe
crisis - an urgent, difficult or dangerous situation
1997 economic crisis

Financial Institutions Development Fund -
the agency under the central bank which takes care of the left over debt from the 1997 crisis
Deposit Protection Agency
- the government agency offering deposit insurance
stem from - come from, be caused by
debt stemming from
the 1997 economic crisis
surcharge
- an extra charge

Mr Kittiratt said 0.46 per cent of the surcharge will be used to repay the Financial Institutions Development Fund's 1.14 trillion baht debt stemming from the 1997 economic crisis, and the remaining 0.01 per cent will be contributed to the Deposit Protection Agency.

burden
- a responsibility, a difficult thing that must be done, a heavy load to carry ภาระ (See glossary)
interest
- payments made for the use of another's money for a period of time
interest burden - the amount that a borrower must pay to the lender each year until the amount borrowed is fully paid back
principal
- the amount borrowed that must be paid back
paying down the principal- when borrower reduces amount borrowed (so they pay less interest)

I believe that we can pay all the interest burden within the first year and that we'll have some money left for paying down the principal.

resolved - when a problem has been solved
state - government
contribution- a regular payment into a fund (to help achieve some goal or invest in something)

state banks' contribution - the amount that state banks must pay into a fund

commercial - for business purposes
sector - a part of an economy
gap - a large difference between people or groups
reduce the gap - reduce the difference
reduce the gap between the two sectors -
reduce the difference in taxes that  the two sectors have to pay (making unequal competitive conditions)

Mr Kittiratt said the meeting resolved that the state banks' contribution to the National Development Fund also must be equal to the surcharges on commercial banks at 0.47 per cent, to reduce the gap between the two sectors.

current - of the present time
insurance - a system of protection against loss, a person pays money every month (premiums) for a guarantee that the company will pay them money if they or their property is damaged or lost (See Wikipedia)
deposit insurance -
protection from the government for people who keep their money in banks, a safety net to promote financial stability in an economy  (See Wikipedia)
insurance
coverage - the greatest loss that insurance will pay for (if the loss happens)

bank accounts - the place where a person or company's money is kept at a bank (has if number, balance, and interest paid on it)
depositor -
a person or company that keeps money in a bank

current
insurance coverage on customers' bank accounts limited to 1 million baht per depositor

effective -
when a law starts to be used

The new protection programme will be effective from August.

The minister said BoT governor Prasarn Trairatvorakul will look into ways to increase the current insurance coverage on customers' bank accounts which is limited to 1 million baht per depositor. This is too small, he said. The new protection programme will be effective from August.

disparity - a big difference between two things
wealth - how much money and assets a person or country owns
distribution - giving something to many people in a group
wealth distribution - wealth is spread out over the people who live in a country (See Wikipedia)
disparity in wealth distribution -
when there are great differences in the wealth of people who live in a country

According to the Bank of Thailand, 98.7 per cent of Thailand's 79 million deposit accounts have balances of less than one million baht, pointing to a huge disparity in wealth distribution.

issued - made available
executive - the highest level managers in a company
transfer - 1. move from one person or organisation to another; 2. to official arrange for someone else to be the owner of something โอน; 2. to move someone or something from one place, vehicle, person or group to another
central bank - the main and largest bank in a country in charge of monetary policy in a company (control of money supply, loans and credit) and provides financial services to the government and other banks (See Wikipedia)

The government last month issued four executive decrees to transfer 1.14 trillion baht in debt from the 1997 crisis to the FIDF, which is under the central bank.

aim - purpose; goal; the thing you hope to achieve by doing something
public debt - money borrowed by the government, government debt
rehabilitation
- improve and make acceptable and suitable for use again; the process of making normal again after suffering injury or harm; making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition the process of returning someone or something to a good or healthy condition, state or way of living
flood restoration and rehabilitation -
fund - a collection of money for money for some purpose
flood insurance - insurance to protect companies from flood damage
domestic
- within the country
domestic investors - companies in Thailand who invest in businesses (foreign companies usually get insurance outside the country)

The aim is to reduce visible public debt and to seek loans amounting to 350 billion baht for water management programmes and flood restoration and rehabilitation and set up a 50 billion baht fund to offer flood insurance for domestic investors.

amended - change
BoT - Bank of Thailand, Thailand's central bank
regulations - official rules that control the way that things are done
amended BoT regulations - changed the rules under which the Bank of Thailand operates
extend a loan -
offer a loan to someone
soft loans - loans that are easy to pay back (with low interest rates, long pay back periods, easy terms)
institutions - large and important organizations, such as universities or banks
financial institutions - banks and other companies that operate like banks (See Wikipedia)
soft loans to financial institutions - easy to pay back loans to banks
extend 300 billion baht in soft loans -
give 300 billion baht in easy loans
extend 300 billion baht in soft loans to financial institutions

It also amended BoT regulations to enable it to extend 300 billion baht in soft loans to financial institutions.

opposition - of a political party that is not part of the government or a group which is against the government
filed - to take official action, e.g., to make a formal complaint
filed petitions -
rule- (of a court or other group with similar authority) to make and announce a decision

decree - an official order or decision made by the ruler of a country
violation - the breaking of a rule or a law; an action that is against a law, agreement, principle, etc. emergency - an unexpected situation involving danger in which immediate action is necessary
The opposition Democrat Party and a group of senators later filed petitions with the Constitution Court to rule whether two of the financial decrees were in violation of Article 184 of the consitution as there is no emergency which requires they be issued.

responsibility
- having to take care of some task as part of your job
transfer full responsibility for repayment

The first decree allows the government to transfer full responsibilityfor repayment of the 1.14 trillion baht in debt and the other allows the government to seek loans amounting to 350 billion baht for water management programmes. The court has accepted the petitions

http://www.bangkokpost.com/learning/learning-from-news/279824/new-t...

 

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