She was commenting after a meeting between representatives of the local unit of GE Consumer Finance and the BOT over regulations related to GE's purchase of a stake in BAY.

"GE chose this solution because once it gets a stake in BAY, it can do its commercial banking business - including lending and deposit receiving - via BAY. Thus, there is no need for another bank [GE Money Retail Bank]," Tarisa said.

The deputy governor said GE had told the central bank it had no intention of breaching any rule under the financial master plan. It will follow the BOT's "one presence" rule by having only one unit in the Thai market.

She said GE's bid to buy a stake in BAY is a deal in which both parties have made their own decisions. BAY will soon discuss details of the 25-per-cent limit on foreign ownership with the central bank.

Earlier, a BOT official said foreign ownership in the Thai bank would not exceed 49 per cent even with GE's shareholding. Generally, the central bank limits foreign ownership of Thai banks to 25 per cent, although it has allowed several banks, including BAY, to boost the ceiling to 49 per cent. BAY has yet to exercise this relaxation.

 GE Money Retail Bank president Piriyah Wisedjinda said after meeting the BOT yesterday that GE will follow all rules in the financial master plan.

"We will come back to talk about the deal again," he said.

BAY announced earlier this month that GE Capital Asia Pacific Ltd, a financial institution under GE Consumer Finance, which in turn is part of General Electric Co (GE), was negotiating the purchase of a 25-per-cent stake in it through the private placement of new shares priced at Bt16 per share.

 According to the central bank's single presence rule, GE is required to merge its local unit with the Bank of Ayudhya if it wants to acquire a stake in the local bank. The single presence rule requires local and foreign institutions to operate under a single vehicle in the local market.

Anoma Srisukkasem

The Nation