History of the credit bureaus in Thailand Authorities in 1994 first call the establishment of a central credit bureau during the drafting of the financial system master plan. Authorities in 1994 first call the establishment of a central credit bureau during the drafting of the financial system master plan. In 1997 the finance ministry reiterated its desire to see a credit bureau established by the end of the year. But the financial crisis began in july led to the project suspended. In 1997 the finance ministry reiterated its desire to see a credit bureau established by the end of the year. But the financial crisis began in july led to the project suspended.

History of the credit bureaus in Thailand In early 1960s,when Dr Puey was the governor the commercial banks were required to submit monthly reports on loans of more than 500,000 baht In early 1960s,when Dr Puey was the governor the commercial banks were required to submit monthly reports on loans of more than 500,000 baht Coverage was expanded to all bank customers in 1986 while the reporting amount was raised to one million baht in 1976 and five million baht in 1990 Coverage was expanded to all bank customers in 1986 while the reporting amount was raised to one million baht in 1976 and five million baht in 1990 In 1976 finance companies were obligated to submit reports to a separate registry In 1976 finance companies were obligated to submit reports to a separate registry

Post crisis effort to set up credit bureau (after 1997) In 1998 after dust settled,ministry of finance and central bank revive the effort to set up credit bureau. In 1998 after dust settled,ministry of finance and central bank revive the effort to set up credit bureau. Ministry of finance went ahead and set up the Thai credit bureau with the Government Housing bank and a local technical partner as shareholders. Ministry of finance went ahead and set up the Thai credit bureau with the Government Housing bank and a local technical partner as shareholders. commercial bank s finally went ahead and set up another bureau and partnered with Thai and a foreign technical partner commercial bank s finally went ahead and set up another bureau and partnered with Thai and a foreign technical partner

Two credit bureaus co-exist Both bureaus start operating about the same time in early 2000 Both bureaus start operating about the same time in early 2000 Both outsource local partners for data centers. Both outsource local partners for data centers. TCB, 49 % owned by the government housing bank and 51 % by the Thai technical partner went for local software developed by its technical partner. TCB, 49 % owned by the government housing bank and 51 % by the Thai technical partner went for local software developed by its technical partner. TCB start with retail consumer loans database, inheriting its partners and relying on data from sate banks and non-bank financial institution such as credit card and hire purchase firms TCB start with retail consumer loans database, inheriting its partners and relying on data from sate banks and non-bank financial institution such as credit card and hire purchase firms the other bureau 50% owned by commercial banks and 50 % by the Thai and foreign technical partners,purchased foreign software and start with corporate and up-market retail loan, using the same data set that commercial banks submitted to central bank. the other bureau 50% owned by commercial banks and 50 % by the Thai and foreign technical partners,purchased foreign software and start with corporate and up-market retail loan, using the same data set that commercial banks submitted to central bank.

While credit bureau were up and running credit information act was drafted Credit information business act was drafted by the central bank in early 2000 Credit information business act was drafted by the central bank in early 2000 Parliament spent a few years changing much of the contents, turning is into a consumers protection law, tightly regulate how bureaus do business and imposing heavy criminal penalties and bureaus for seemingly possible small mistake Parliament spent a few years changing much of the contents, turning is into a consumers protection law, tightly regulate how bureaus do business and imposing heavy criminal penalties and bureaus for seemingly possible small mistake

Protections to owner of information Right to know which information belonging to Right to know which information belonging to him kept by the credit information company him kept by the credit information company Right to inspect his information Right to inspect his information Right to request for correction of incorrect information Right to request for correction of incorrect information Right to object when he is aware that information belonging to him is incorrect. Right to object when he is aware that information belonging to him is incorrect. Right to be informed the result of inspection of information belonging to him within specified time. Right to be informed the result of inspection of information belonging to him within specified time. Right to know causes of refusal of the application for credit facilities or services from financial institution in the case that the financial institution uses information of credit information company as a ground for such refusal Right to know causes of refusal of the application for credit facilities or services from financial institution in the case that the financial institution uses information of credit information company as a ground for such refusal Right to appeal to the committee pursuant to art. 27 Right to appeal to the committee pursuant to art. 27

Protection to owner of information May pay application fee inspect his information as set by the committee May pay application fee inspect his information as set by the committee The fee will not exceeding 200 baht The fee will not exceeding 200 baht If the financial institution refuse the provision of credit facilities due to the reason relevant to information of such customer, the financial institution shall state the reason(s) of such refusal or increase of service fee including source of information to the customer without paying any fee. If the financial institution refuse the provision of credit facilities due to the reason relevant to information of such customer, the financial institution shall state the reason(s) of such refusal or increase of service fee including source of information to the customer without paying any fee.

Critical items of the law Article 18 & 19 :members must submit correct and up-to –date in credit information to the bureau (regardless of permission by data owners) then must notify data owner within 30 days Article 18 & 19 :members must submit correct and up-to –date in credit information to the bureau (regardless of permission by data owners) then must notify data owner within 30 days failure to act could bring fines and/or 5-10 years jail penalty failure to act could bring fines and/or 5-10 years jail penalty

Critical items of the law Article 20 :credit bureau must disclose to members (by written consent of the data owners) credit information to be used for the purpose of credit granting Article 20 :credit bureau must disclose to members (by written consent of the data owners) credit information to be used for the purpose of credit granting Failure to act could bring fine and/or 5 years penalty Failure to act could bring fine and/or 5 years penalty

Credit information business act 2002 Law passed all reading in late 2002,became effective march 2003 Law passed all reading in late 2002,became effective march 2003 Fearing law penalties: members and board of directors and management of both bureaus resign Fearing law penalties: members and board of directors and management of both bureaus resign Both bureaus suspended operation for 3 months during Q2/2003 and asked credit information protection committee to clarify law Both bureaus suspended operation for 3 months during Q2/2003 and asked credit information protection committee to clarify law World bank and CDIA experts met with Thai officials and express concerns World bank and CDIA experts met with Thai officials and express concerns

Credit information protection committee CIPC worked to loosen laws strict requirements. soften members fears for data mistakes and allow bureaus to disclose credit information before actually seeing the written consent by having members collect consent and confirm receipt of consent on online screen CIPC worked to loosen laws strict requirements. soften members fears for data mistakes and allow bureaus to disclose credit information before actually seeing the written consent by having members collect consent and confirm receipt of consent on online screen Both bureaus re-opened for business in june 2003 Both bureaus re-opened for business in june 2003

Credit Information Business act 2002 Financial Institution eligible for credit membership: Financial Institution eligible for credit membership: Commercial bank Commercial bank Financial company Financial company Securities brokerages Securities brokerages Life insurers Life insurers Credit foncier company Credit foncier company General insurers General insurers Credit card issuers Credit card issuers Financial institution Financial institution Credit –granting entities as announced by the credit information protection committee Credit –granting entities as announced by the credit information protection committee

Current attempt to merge Thailands two credit bureaus Ministry of finance sees merger of the two bureaus as beneficial to Thai financial system. Ministry of finance sees merger of the two bureaus as beneficial to Thai financial system. Ministry of finance is working on details; systems and financials. Ministry of finance is working on details; systems and financials.

Complaints on credit reporting Bank did not correct data after customer settle the debt. Bank did not correct data after customer settle the debt. Owner of information could not get new loan. Owner of information could not get new loan. The bill help customer got new loan within 30 days.( fine 300,000 baht and fine of not exceeding baht 10,000 per day during the period of violation or until the correction is made. The bill help customer got new loan within 30 days.( fine 300,000 baht and fine of not exceeding baht 10,000 per day during the period of violation or until the correction is made.

Correction to be made Art 48 any member who does not inform to its customers about the information provided to credit information company as stipulated in art 18 or fails to comply with the rules and procedures determined by the committee as stipulated in art 18,shall be subject to imprisonment of five to ten years, or fine of not exceeding baht 500,000 or both. Art 48 any member who does not inform to its customers about the information provided to credit information company as stipulated in art 18 or fails to comply with the rules and procedures determined by the committee as stipulated in art 18,shall be subject to imprisonment of five to ten years, or fine of not exceeding baht 500,000 or both. (The imprisonment should be deleted.) (The imprisonment should be deleted.)