Bank of Thailand: Submission of Policy Guideline on Liquidity Management

This letter is on behalf of the Governor of Thailand instructing all the commercial banks to follow the prescribed guidelines on liquidity management.

It states that:

• The purpose of the guidelines is to enable commercial banks to have appropriate liquidity management by empowering them to receive the repayment of liabilities and obligations which are due and payable;
• Banks maintain funds or liquid assets in an amount sufficient to handle any crisis scenario for a certain time-period.

Some of the salient features of the circular include:

• Apart from maintaining an efficient liquidity risk management system, banks must ensure appropriate reporting systems, whereby their net liquidity position can be documented;
• If the commercial banks already maintain a reporting format to document the status of liquidity position, they must ensure that the existing forms are materially in line with the forms of the Bank of Thailand;
• The inspector of commercial banks must have access to the status report on the liquidity positions of banks as and when required.