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Published on July 18, 2007

Householders had parked Bt251.5 billion in the GHB and in GSB certificates as of March, up 42.6 per cent over the same

date last year, said the Bank of Thailand (BOT).

The increase was considerably larger than the overall expansion of savings in the household sector, which grew 6.15 per cent to Bt6.1 trillion.

Householders moved their money out of commercial banks after deposit interest rates were cut sharply in line with changes in the BOT's policy-interest rate. Some put their money in the GHB, which offers deposit interest rates 25-50 basis points higher than other banks.

GSB certificates have also been popular among savers, despite having lower interest rates than commercial banks, because they have low risk and offer a good chance of winning a jackpot, much like a government lottery.

Household savings at the GSB increased 8.9 per cent in the year from March 2006, reaching Bt552.7 billion.

The BOT said household savings in the Bank for Agriculture and Agricultural Cooperatives increased a huge 25.6 per cent in the year from March 2006, reaching Bt273 billion. The bank has been providing various packages to encourage its customers to save more.

The household sector has also increased its savings with life insurers, with a 13.3 per cent hike to Bt572.5 billion as of March.

These figures compare with growth of household savings at commercial banks of only 2.8 per cent in the year to March, reaching Bt4.4 trillion.

The BOT said promissory notes issued by finance companies and credit fonciers contracted 33.4 per cent and 26.8 per cent year on year, respectively, because their business had been dwindling in preparation for ceasing operations.

Anoma Srisukkasem

The Nation