WORLD TRADE
ORGANIZATIONS/C/N/72
29 September 1998
(98-3760)
Council for Trade in Services Original:  English
NOTIFICATION PURSUANT TO ARTICLE III:3 OF THE
GENERAL AGREEMENT ON TRADE IN SERVICES
The following notification has been received from the delegation of Thailand.
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1. Member notifying :
Thailand
2. Notification under:
Article III, paragraph 3, of the General Agreement on Trade in Services
3. Date of entry into force:
29 June 1997
Duration:
Indefinite
4. Agency responsible for implementati on and enforcement of the measures:
Ministry of Finance and Bank of Thailand
5. Description of the measures:
Measure:
The Emergency Decree Amending the Comm ercial Banking Act B.E. 2505 (No. 2) 
B.E. 2540 (1997)
Description:
Principles
Amendments to the commercial Banking Act B.E. 2505 are made as follows:(1) Relaxation of regulations on foreign shareholder limit and on the appointment of
foreign directors in a commercial bank (amendment to Section 5 quinque);  andS/C/N/72
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(2) Relaxation of regulations to allow a person serving as a director or holding any other
position in a commercial bank to concurrently serve as a director or hold any other
position in another commercial bank for a certain period and on certain conditions
(amendment to Section 19).
Rationale :
The Commercial Banking Act B.E. 2505 prohibits persons of foreign nationality to hold
shares, or serve as directors, in excess of one-fourth of the total amount of shares and of the
total number of directors, respectively, in a commercial bank.  It also prohibits a person
serving as a director or holding any other position in a commercial bank to concurrently serve
or hold a position in another commercial bank.  However, as the financial system is currentlyfacing a confidence crisis and a problem of a deteriorating asset quality in tandem with the
economic slowdown it is necessary to attract foreign funds to support the domestic financial
system.  Therefore, it is extremely urgent to issue this emergency decree relaxing the
regulations on foreign shareholder and foreign management limitations of commercial banks,
as well as the regulations on cross-holding of positions.
Essence :
According to this emergency decree, the following amendments are made to the Commercial
Banking Act B.E. 2505:
"Section 5 quinque.  A Commercial bank shall have no less than three-fourths of its
total amount of shares sold held by persons of Thai nationality, and shall have as it s
directors who are of Thai nationality at no less than three-fourths of the total number
of directors.  In cases where the situation calls for a remedial action to improve thecondition or business of a commercial bank, the Minister, upon recommendation of
the Bank of Thailand, has the authority to relax the above limits on the amount of
shares or the number of directors.  Such relaxation may be granted with any
condition."
"Section 19.  No person serving as a director or holding any other position in a
commercial bank shall concurrently serve as a director or hold any other position inanother commercial bank except of the following cases:
(1) Such position is related to legal counselling or one not connected with the operation
of or the giving of advice to, a commercial bank;
(2) Waiving is granted by the Minister, upon recommendation of the Bank of Thailand
for a period not exceeding three years with or without conditions."
This emergency decree will be effective on the day following the announcement in the Royal
Gazette.
6. Members affected:
NoneS/C/N/72
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7. The texts are available from:
Ministry of Finance
Fiscal Policy Office
Monetary Policy and Financial Institution DivisionRama VI Rd.
Bangkok 10500
Telephone: (662) 273 9020 ext. 3231-3
Telefax:: (662) 618 3367
Bank of Thailand
Samsan Road
Bangkok 10500
Telephone: (662) 283 5353
Telefax: (662) 280 0449
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