Bangkok: The Palang Pracharath Party (PPRP) has called on the Cabinet to revisit the draft Financial Centralization Act, highlighting concerns that the proposed legislation may not achieve its intended goals and could potentially usurp monetary policy authority from the Bank of Thailand (BOT).
According to Thai News Agency, Mr. Uttama Saowanayon, Chairman of the Policy Committee of the PPRP, and Mr. Thirachai Phuvanatnaranubala, Chairman of the Academic Committee of the PPRP, expressed their opposition to the Financial Business Central Act during a press conference. They emphasized the necessity of a comprehensive review of the draft, given its implications on the financial system, which forms the backbone of the economy. Mr. Uttama emphasized that while discussions with key agencies, including the BOT and the Securities and Exchange Commission (SEC), have been conducted, the draft still requires careful consideration to prevent overlap with existing regulatory bodies and avoid political influence.
Mr. Uttama advocated for the establishment of mechanisms to facilitate regular dialogue between the Ministry of Finance and financial regulatory agencies. He suggested that these discussions, which would cover both normal and crisis situations, could enhance the financial system's resilience. Such a mechanism could be implemented through a mandate from the Prime Minister with Cabinet approval, avoiding duplication of efforts among existing agencies.
Furthermore, Mr. Uttama remarked that legal measures alone are insufficient to position Thailand as a financial hub. He cited Singapore's success, attributing it to business-friendly policies, transparent regulations, robust financial infrastructure, and a skilled labor force. He stressed the importance of political stability, adherence to international legal standards, and an investment-friendly environment to attract global investors.
Mr. Thirachai added that Thailand lacks crucial elements to become a financial hub, particularly in legal and governance areas. He pointed out that Thailand's current legal system does not inspire confidence for conducting large, complex offshore transactions. Additionally, Thailand's low ranking on the 2024 Corruption Perception Index further diminishes its appeal compared to higher-ranked countries like Singapore and Hong Kong.
Mr. Thirachai also expressed concerns about potential hidden agendas within the draft law, particularly regarding the issuance of digital currency for the onshore market. He noted inconsistencies in the draft's provisions, which might suggest an intention to issue digital currency domestically, potentially bypassing the BOT's authority.
Both Mr. Uttama and Mr. Thirachai urged the Cabinet to carefully review the draft law. They warned that enacting legislation that fails to meet its goals but consolidates monetary policy power away from the BOT could have detrimental effects on Thailand's international credibility.