About Exim Thailand

Ministerial Regulations
MINISTERIAL REGULATIONS B.E. 2538 (1995)

Issued under the provisions of Export-Import Bank of Thailand Act
B.E. 2536 (1993)

By virtue of Section 4 paragraph one and Section 22 of Export-Import Bank of Thailand Act, B.E. 2536 (1993), Minister of Finance hereby issues the following Ministerial Regulations :
Clause 1 In this Ministerial Regulations :
“Exchange Rate Contract” means a contract or document of right regarding the management to protect the risks of exchange rate between two or more currencies, namely, the forward foreign currency purchase contract, the contract of right to purchase foreign currency at the prescribed rate and period, the contract of right to accept or deliver foreign currency in the future at the prescribed rate and period, the foreign currency debt conversion contract or other contracts in the same manner as prescribed by the Board.
“Interest Rate Contract” means a contract or document of right regarding the management to protect the risks of interest rate, namely, the forward interest rate fixing contract, the contract of right to accept or pay interest at prescribed rate and period, the contract to accept or pay interest in the future at the prescribed rate and period, the contract to convert the interest rate debt from the fixed interest rate to the floated interest rate or vice versa or other contracts in the same manner as prescribed by the Board.
“Central Bank” means a foreign institution or organization responsible for the fiscal policy or maintain the stability and security of the financial institution system of that country.

Clause 2 The Bank shall maintain the Capital Fund in proportion to the assets and commitments originated from the suretyship, the guarantee or the aval and any other commitments except for the commitments originated from the warranty against risks in accordance with Section 8 (6) and (7) in respect of the rules and calculation procedure as follows:
(1) All items in the financial statement on the assets and commitments, used for the calculations, shall use the book value as of the report date, except for the commitments originated from the warranty against risks in accordance with Section 8 (6) and (7), whereas the value of assets and commitments in foreign currencies shall be first converted to Thai currency.
(2) Multiply each item of asset by the risk weight of that asset as prescribed in Clause 5.
(3) Multiply each item of commitment by the conversion value of that commitment as prescribed in Clause 6 and once again multiply the result with the risk weight of that asset as prescribed in Clause 5.
(4) Add the multiplication results of the assets under (2) to all items of the multiplication results of the commitments under (3).
The ratio of the Capital Fund to the result of calculations under (4) shall not be less than eight percent.

Clause 3 The Bank shall maintain the Capital Fund in proportion to the commitments originated from the warranty against the risks in accordance with Section 8 (6) and (7) by deducting the reserve fund to pay compensation from the commitment items originated from all items of warranty against the risks, except for the commitments originated from the warranty against the risks which the Cabinet has resolved to appropriate budget for payment of the debt by using the combined book values as of the report date whereas the commitment values originated from the warranty in foreign currencies shall be first converted to the Thai currency.
The ratio of the Capital Fund to the commitments originated from the warranty of the risks pursuant to paragraph one shall not be lower than twenty percent.

Clause 4 For the conversion of all items of the asset values and commitments in foreign currencies into Thai currency, the currency exchange rate pursuant to the average rate between the minimum buying rates and the maximum selling rates as prescribed by the Exchange Equalization Fund at the report date. For the currencies not prescribed by the Exchange Equalization Fund, the cross rate calculation method shall be used.

Clause 5 The risk weights for each type of asset are as follows:
(1) The assets having the risk weight of 0 are :
(a) The cash, both in Thai and foreign currencies;
(b) The deposits at the Bank of Thailand;
(c) The investments in the bond markets operated by the Bank of Thailand with the contracts for repurchase or resale.
(d) The investments in the Thai Government securities or the securities which the Ministry of Finance guaranteed the principal and interest or the Bank of Thailand securities or the specific part of the credits not exceeding the value of the said securities used as collaterals, including the accrued interest receivable.
(e) The credits which the Ministry of Finance guaranteed the principal and interest or the credits which the Cabinet resolved to appropriate budget for payment of the debt.
(f) The credits or investments in the securities of the government or the Central Bank as prescribed by the Board under the approval of the Minister or the credit parts unconditionally warranted by the said government or Central Bank.
(g) The specific parts of credits not exceeding the value of the securities of the government or the Central Bank as prescribed by the Board under the approval of the Minister as guarantee, including the accrued interest receivable.
(h) The credits or the investments in the securities of the government or Central Bank other than those prescribed by the Board under the approval of the Minister or the credits unconditionally guaranteed by the said government or Central Bank, including the accrued interest receivable, whereas they shall be in the currency of that country and not exceed the debts owed by the Bank in that currency.
(i) Inter-office account balance of the Bank.
(j) The specific parts of the credits equivalent to the amount set aside for doubtful debts.
(k) Prepaid expenses.
(l) The cash under collection process for the benefits of clients.

(2) The assets having the risk weight of 0.2 are :
(a) Deposits, credits or investments in the securities issued by commercial banks or credits warranted, given aval or guaranteed by commercial banks or credits with instruments issued by commercial banks as collaterals, including the accrued interest receivable.
(b) Deposits, credits or investments in the securities issued by the Government Housing Bank, the Government Saving Bank or the Bank for Agriculture and Agricultural Cooperatives or credits warranted, given aval or guaranteed by the said banks or credits with instruments issued by the said banks as collaterals, including the accrued interest receivable.
(c) Deposits, credits or investments in the securities issued by finance companies, finance and securities companies or credit foncier companies or credits warranted, given aval or guaranteed by the said companies or credits with instruments issued by the said companies as collaterals, including the accrued interest receivable.
(d) Credits or investments in the securities issued by juristic persons established by specific law or state enterprises or credits warranted, given aval or guaranteed by the said juristic persons or state enterprises or credits with instruments issued by the said juristic persons or state enterprises as collaterals, including the accrued interest receivable.
(e) Deposits, credits or investments in the securities issued by commercial banks incorporated in the countries prescribed by the Board under the approval of the Minister or credits warranted, given aval or guaranteed by the said commercial banks or credits with instruments issued by the said commercial banks as collaterals, including the accrued interest receivable.
(f) Credits or investments in the securities issued by state organizations the countries prescribed by the Board under the approval of the Minister or credits warranted, given aval or guaranteed by the said organizations or credits with instruments issued by the said organizations as collaterals, including the accrued interest receivable.
(g) Credits or investments in the securities issued by international organizations in the countries prescribed by the Board under the approval of the Minister or credits warranted, given aval or guaranteed by the said organizations or credits with instruments issued by the said organizations as collaterals, including the accrued interest receivable.
(h) Deposits, credits or investments in the securities issued by commercial banks incorporated outside the countries prescribed by the Board under the approval of the Minister or credits warranted, given aval or guaranteed by the said commercial banks or credits with instruments issued by the said commercial banks as collaterals, including the accrued interest receivable, whereas the remaining maturity period shall not exceed one year.
(i) Credits for export under letters of credits for which the goods have already been shipped in accordance with the conditions. However, in case that the issuers of letters of credits are commercial banks incorporated outside the countries prescribed by the Board under the approval of the Minister, the remaining maturity period of such letters of credits shall not exceed one year.
(j) Credits resolved by the Cabinet to appropriate budget for payment of debt but the Bureau of the Budget has not appropriated the debt payment money until the payment has been overdue two years or more.

(3) The assets having the risk weight of 0.5 are:
(a) Credits or investments in the securities as issued by municipalities or credits warranted, given aval or guaranteed by municipalities or credits with instruments issued by municipalities as collaterals.
(b) Credits for housing welfare to staff of the Bank whereby the Bank accepts mortgage of land and/or structures as the first collateral. However, the said land and structures shall be worth not less than the accrued credit amount, including the accrued interest rate.
(c) The commitments which are Exchange Rate Contracts or the Interest Rate Contract as multiplied by the conversion factor as already prescribed in Clause 6 unless the parties to the contract shall be classified to the group having risk weights lower than 0.5.

(4) The assets having the risk weight of 1 are:
(a) Credits to private sectors, including the accrued interest receivable.
(b) Deposits, credits or investments in the securities issued by commercial banks incorporated outside the countries prescribed by the Board under the approval of the Minister or credits warranted, given aval or guaranteed by the said commercial banks or credits with instruments issued by the said commercial banks as collaterals with the remaining maturity period exceeding one year.
(c) Credits or investments in the securities of the government or Central Bank outside the countries prescribed by the Board under the approval of the Minister or credits unconditionally warranted by the said government or Central Bank, including the accrued interest receivable not in the currency of that country or exceeding the debts owed by the Bank in that currency.
(d) Property, plant, equipment, other fixed assets and property pending sale.
(e) Other assets without risk weights stated in (1), (2) and (3).

Clause 6 The conversion factors of each type of commitment are as follows :
(1) The commitments having conversion factor of 0 are :
(a) Bills for collection.
(b) Loan amount not yet withdrawn by clients.
(c) Commitments which the Bank may cancel at any time.
(d) Commitments of the Bank resolved by the Council of Ministers to appropriate budget for payment of debts.
(e) Other commitments without conversion factors stated in (2), (3), (4), and (5).

(2) Commitments having conversion factor of 0.2, namely, commitments for importing in accordance with letters of credits with and yet without supporting documents.

(3) Commitments having conversion factor of 0.5, namely, commitments depending on the operations of clients, e.g., warranty against construction contract or warranty against submitting sealed bid etc.

(4) Commitments having conversion factor of 1 are :
(a) To give aval for bills, to certify bills, warranty against loan and warranty
(b) Endorsement of bills of type the endorsees having the right to recourse.
(c) Asset purchase contracts unconditionally complied by the Bank.

(5) Commitments for the Exchange Rate Contract and Interest Rate Contract shall be prescribed in accordance with the remaining period of the contract as follows :
(a) For the remaining period of the contract not exceeding one year, the conversion factors are as follows :
(1) Exchange Rate Contract having conversion factor of 0.02.
(2) Interest Rate Contract having conversion factor of 0.005.
(b) For the remaining period of the contract for one year or more, the conversion factors are as follows :
(1) Exchange Rate Contract having conversion factor of 0.05.
(2) Interest Rate Contract having conversion factor of 0.01.
(c) For the remaining period of the contract for one year or more, the conversion factors are as follows :
(1) Exchange Rate Contract having conversion factor of 0.05.
(2) Interest Rate Contract having conversion factor of 0.01.
In this event of the same client entering Exchange Rate Contract or Interest Rate Contract both for buying and selling, the amount of money for buying and selling shall first be multiplied by the conversion factors and the results thereof shall be off-set with each other and the net amount shall then be multiplied with the risk weight of each type of asset as prescribed in Clause 5.

Given this 30th day of March B.E. 2538 (1995)
Tarin Nimmanhemin
Minister of Finance
Note : The reasons for issuing this Ministerial Regulations are due to Section 22 of Export-Import Bank of Thailand Act, B.E. 2536 (1993) providing that Export-Import Bank of Thailand shall maintain the capital fund in proportion with the assets, debts or commitments in accordance with the rules, procedure and conditions as prescribed by the Ministerial Regulations. It is thus expedient to prescribe the rules, procedure and conditions for Export-Import Bank of Thailand to maintain the capital fund in proportion to the said assets, debts or commitments. Therefore, it is necessary to issue this Ministerial Regulations.
(Reference) : The Government Gazette, Volume 112, Part 13 a, March 30, B.E. 2538 (1195), pp. 12-18)