Thai Government To Keep Islamic Bank Afloat

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BANGKOK, Jan 13 – The Thai government will keep the troubled Islamic Bank of Thailand (IBANK) afloat, said Prime Minister Gen Prayuth Chan-ocha. He said the government was not thinking about closing the bank although it was facing problems with non-performing loans (NPLs).

“The bank needs a change in the way it approves loans. In the past it gave out loans without collaterals or exceeded the value of the collaterals. “We are not thinking about dissolving IBANK because we are thinking of our Muslim brothers,” he said at a press conference after the cabinet meeting today.

He said several cooperatives linked to the problems experienced by IBANK had been investigated and prosecuted. A Bangkok Post report last month said the State Enterprises Policy Commission has thrown a lifeline to IBANK by approving 16 billion baht in fresh funds.

It said IBANK’s NPLs amounted to 50 billion baht, or half of its total lending. Thailand’s Finance Ministry holds 48.54 per cent stake in the bank, Government Savings Bank 39.81 per cent, Krungthai Bank 9.83 per cent and other shareholders the rest.

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