GSB boss resigns over BAAC 'rice' loan

Government Savings Bank (GSB) president Worawit Chailimpamontri on Tuesday announced his resignation in an attempt to take responsibility for mass withdrawals sparked by an inter-bank loan to the Bank for Agriculture and Agricultural Cooperatives (BAAC).

Despite denials from the bank, the five billion baht loan to the BACC is widely considered to be intended to pay farmers owed money under the loss-ridden rice-pledging scheme.

Mr Worawit made the announcement of his resignation after a GSB board meeting to discuss unusually high cash withdrawals by panicked customers following the bank’s decision to extend a loan to the BAAC.

Mr Worawit said he had reviewed the negative impact of the loan deal in the past few days and decided to resign after customers withdrew more than 30 billion baht on Monday alone and continued to take money out of the bank today. 

He said he hoped his resignation would show that he was responsible for the loan decision and restore confidence in the bank, adding that he would serve as GSB acting president for 30 days as required by the law.

Mr Worawit repeated that the GSB had extended the five billion baht loan as part of its existing 20-billion-baht credit line to the BAAC on the inter-bank market, and insisted that the funds were not meant to shore-up the rice-pledging scheme.

However, GSB employees were not convinced by his explanation. They gathered at the bank's headquarters this morning to demand his resignation in protest at the BAAC loan and its alleged use to fund the rice subsidy project.

Meanwhile, the GSB board passed a resolution to cancel its deliberation on offering further such loans for the BACC and pledged to retrieve the five billion baht loan earlier approved.

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