The Bank of Thailand (BoT) has urgently advised the government to reduce the “digital wallet” plan to provide the 10,000 baht benefit to around 15 million “financially fragile” individuals, instead of the current plan for 50 million people.
According to the BoT, this adjustment would allow for immediate implementation at a cost of only 150 billion baht.
However, the government has dismissed the central bank’s last-minute advice, stating that there is nothing new in its recommendations.
The central bank argued that these “fragile” individuals, including low-income workers and holders of state welfare cards, tend to spend more on consumption and purchase more locally-made products than other groups. The 10,000 baht would help alleviate their financial burden and stimulate the economy more effectively.
It also suggests implementing the digital wallet plan in stages to minimize the impact on fiscal stability.
It cautioned that the current 500 billion baht scheme would create a long-term fiscal burden, potentially leading to a credit rating downgrade and decreased investment confidence in Thailand if public sector debt stability is not maintained.
The proposed allocation of funds from the 2024 fiscal budget for the scheme would deplete the reserves of the Central Fund, hindering its ability to respond to emergencies such as extreme natural disasters.
The BoT added that the 500 billion baht should be allocated to more impactful projects addressing structural issues and enhancing long-term economic potential.
The central bank, in its oversight role of special financial institutions like the Bank of Agriculture and Agricultural Cooperatives (BAAC), commented on the government’s choice to involve the BAAC in the digital wallet plan despite its outstanding debt of 800 billion baht, which could jeopardize the bank’s liquidity and depositor confidence.
The central bank also voiced concerns about the system's susceptibility to cyber attacks and potential leaks of private individual and business transaction information within the scheme. It recommended immediate measures to address these security risks.
Finance Permanent Secretary Lawaron Saengsanit countered the central bank’s letter, stating that it will not impact the scheme as it has already received cabinet approval.
He indicated that all the recommendations in the letter had been addressed by the central bank’s governor, and the Digital Wallet Scheme Policy Committee had already responded to the central bank.
Lawaron confirmed that the scheme would proceed as planned, with the 10,000 baht benefit being distributed to approximately 50 million Thais in the fourth quarter of this year.
