New Thai Bank Rules Revise Regulations on Directorships.

Byline: Darana Chudasri

Sep. 7--Governance rules imposed on local banks by the Bank of Thailand will be revised, allowing bank directors to hold outside directorships at more than three companies.

Two years ago, the central bank, under former governor M.R. Chatumongol Sonakul, restricted bank directors from more than three outside director positions in a bid to improve professionalism at bank boards.

But regulators now say they will relax the restriction, to encourage bank directors to broaden their experience in the manufacturing and services sector, although bank directors serving at other companies must not have any personal shareholdings or management authority.

At the same time, the central bank yesterday also said that it would tighten rules on lending to related parties and shareholding by banks in private firms.

Tarisa Watanagase, an assistant central bank governor, said that bank directors would still be restricted to no more than three outside seats for positions of board chairman, executive chairman, executive director or an authorised director.

Rules on related party lending, defined as loans made to bank executives, directors or companies holding a 5 percent share in the bank, would also be tightened.