Depositor growth of 3.37% results in 93.46 million depositors protected, DPA bolsters confidence in the Thai deposit protection scheme
Bangkok, 2 November 2023 – the Deposit Protection Agency (DPA) reported 2023 deposit statistics, reaffirmed its efforts to drive the 4th phase of its strategic plan (2022-2026) forward, and reinforced its commitment to maintaining stability in the financial institution system. Deposit statistics as of the end of August 2023 indicate there were 93.46 million depositors protected by the scheme (an increase of 3.37% YoY) and the amount of deposits protected was 15.96 trillion baht (a decrease of 1.32%) – attributable to volatile economic conditions. Looking ahead, the DPA has defined key milestones for 2024 that include rapid depositor reimbursement readiness, liquidation and asset management, and collaboration with other agencies regarding enhancing financial stability and raising awareness about deposit protection among depositors and the public to foster overall financial well-being, especially in the current dynamic and uncertain economic environment that impacts individuals’ financial security.
Mr. Songpol Chevapanyaroj, President of the Deposit Protection Agency, stated that “from deposit statistics dating back from 2019 until August 2023, the number of depositors with no more than 50,000 baht has continued to increase annually – an increase of 4.45% as of August 2023 – but the total amount of deposits has begun to contract since 2022 (-0.63%) and is currently at
-3.61% as of August 2023. Depositors with more than 50,000 baht but less than 1 million baht have continued to decrease in the past 5 years in terms of both the number of depositors and the amount of deposits. This decline can be attributed to rising cost-of-living, where depositors must withdraw their savings for daily expenses and results in weaker financial health. Even institutional deposits have shown a decrease this year due to the global economic slowdown, rising pressures from war, higher energy prices, and tighter monetary policy from central banks that aim to keep interest rates high, thereby directly affecting consumption and investments.
Data as of the end of August 2023 show that the amount of protected deposits by value was 15.96 trillion baht, lower by 212,699 million baht compared to the end of 2022 – a decrease of 1.32%. This decline can be attributed to current economic conditions and higher cost-of-living, coupled with investment products that provide additional choices for investors seeking higher returns. It is expected that the amount of protected deposits this year will continue to contract and is consistent with low loan growth overall. However, the number of protected depositors rose to 93.46 million people – an increase of 3.05 million depositors or 3.37%. The current coverage limit of 1 million baht as prescribed in law can fully protect 98.09% of depositors in the financial institution system, including the majority of retail depositors in the country.
Given the statistical trends for deposits and the rapidly evolving economy, society, and environment, the DPA reaffirmed its efforts to drive the 4th phase of its strategic plan (2022-2026) forward in various aspects – including the analysis of lessons learned from international bank resolution cases that can serve as a basis for how to manage, resolve, and recover from financial institution crises. The DPA continues to reinforce its vision of being a trustworthy and modern deposit protection organization that can foster depositor and public confidence by focusing on the improvement and effectiveness of depositor reimbursement and liquidation and asset management, and supporting initiatives to enhance financial literacy and information about deposit protection. For 2024, the DPA has defined key milestones such as more frequent depositor data verification and calculation from protected financial institutions, collaboration with Specialized Financial Institutions (SFIs) in being a Paying Agent, preparation of liquidation and asset management procedures, developing a deposit protection signage to display on digital financial services platform, and preparations for protecting Virtual Banks that will become operational in the future. These action plans will serve to foster confidence in the deposit protection system and the financial institutions that serve depositors and the public.
The DPA’s public awareness campaigns continue to emphasize the enhancement of financial literacy for depositors and the public. This is achieved through various activities that are carried out continuously and focus on specific target groups such as students ranging from secondary school to university. These activities are jointly held by the Bank of Thailand, Fiscal Policy Office (Ministry of Finance), and other agencies in the financial sector such as the National Savings Fund (NSF), Securities and Exchange Commission (S.E.C.), the Student Loan Fund (SLF), and the Government Pension Fund (GPF). Moreover, the DPA produced a board game called “Cash Up” that is an easy-to-understand edutainment marketing tool that provides information about deposit protection and financial literacy.
Depositors and those who require more deposit protection information and new update can visit the DPA website at www.dpa.or.th or follow the DPA’ssocial media platforms such as Facebook, YouTube, Twitter, Line, and LinkedIn by searching ID ‘dpathailand’ or contact DPA Contact Center 1158