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Commercial bank business in Thailand started
with the establishment of a branch of the
Hongkong and Shanghai Bank in 1888 during the
modernization period of the King Chulalongkorn.
In the subsequent year, more European and
business banks opened their branches, making
foreign banks the dominant players in the local
banking industry.In 1906, Siam Commercial Bank
became the first Thai bank to be established to
counter the dominance of foreign banks. During
the World War II, most foreign banks were
closed, leading to the opening of several Thai
banks to fill the gap, largely to finance trade
with Asian countries.The implementation of
consecutive economic and social development
plans since 1960 resulted in massive investments
in infrastructure throughout the country. This
leads to the rapid expansion of bank branches in
the provinces numbering over 3,000 throughout
the country now.After the war, the Royal Thai
Government adjusted a protective policy to
promote the growth of Thai banks by limiting
foreign bank to one branch office. Due to this
restriction, foreign banks remain relatively
small players in the Thai banking industry,
concentrating mostly a wholesale banking markets
executing much of their business
offshore.
Prior to November 1997, Thai
law restricted foreign ownership and control of
banks, permitting foreign investors to hold no
more than 25 percent of shares sold. This was
liberalized in November 1997 to permit 100
percent foreign shareholding for a period of 10
years. After 10 years, they will not be required
to divest their shares, but if they hold more
than 49 percent of shares sold they are not
permitted to acquire any additional
shares. | |
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