Lao, Thai central banks enhance cooperation on depositor protection

Lao, Thai central banks enhance cooperation on depositor protection

The Bank of the Lao PDR and Bank of Thailand have reached a new agreement to enhance cooperation on the protection of money depositors.

Lao Depositor Protection Fund Director, Mr Santi Phonmeuang and Thai Deposit Protection Agency Office Director Mr Sorasith Sunthornkes signed the three year Memorandum of Understanding earlier this month in Luang Prabang province, aiming to enhance cooperation among the two organisations.

According to the MOU, the two organisations will hold meetings at least once a year as a forum to share information on the protection of money depositors and also increase cooperation on human resource development.

The MOU to establish the Lao and Thai depositor protection fund forms part of efforts by the Lao and Thai central banks to enhance cooperation, paving the way for the establishment of the Asean Economic Community in 2015.

Deputy Governor of the Bank of the Lao PDR, Mr Sonexay Sithphaxay and a number of senior central bank officials who are stationed in northern provinces of Laos also attended the event.

Mr Sonexay said deposit protection is one of the works which the Bank of the Lao PDR has prioritised, adding that protection of d epositors will also ensure the security and stability of commercial banks in Laos.

He said that Laos had learnt a number of lessons from the bankruptcy of commercial banks in foreign countries in 1997 and 2008, stressing that the collapses of commercial banks can have negative impa cts not only on money depositors but also people's general trust in the banks.

Laos established a Depositor Protection Fund in 1999, aiming to protect interests of the money depositors from the unexpected collapse of commercial banks in Laos, which also aim s to ensure the security of the commercial banks in the country, he said.

There are more than 30 commercial banks in Laos. The rapid growth of the Lao banking sector was made possible a fter the Bank of the Lao PDR relaxed restrictions on the establishment of commercial banks.

The Lao central bank considers that the rapid growth of the commercial banks will help Lao people to access investment funds to establish and expand their businesses, helping create jobs and income for Lao people.

vientiane times