A study of the history and development of commercial banking in Thailand, is implicitly a study of The Siam Commercial Bank’s history. On the other hand, a study of the history of The Siam Commercial Bank is also a study of the evolution of the country’s commercial banking system following foundation of The Thai Panich (Siam Commercial) Bank in 1906.
Commercial banking began in Thailand in 1888 when the first of three foreign bank opened branches to provide services related to international trade, the purchase and issuance of bills of exchange and documents for monetary exchange. As these services were provided by foreign bankers and were available only in Bangkok, or in provinces that had good potential for the banking business, a more general system of branch banking was not developed to include the extension of loans, financing investment and other banking services.
Limited financial liquidity and general market risks also acted as obstacles to this development. The successful establishment of The Siam Commercial Bank encouraged Thai and Chinese merchants to found other commercial banks from 1907.
Since then seven commercial banks have been set up in Thailand comprising the branches of foreign banks, The Siam Commercial Bank, and the other banks founded by the Chinese merchants. These banks operated their business without any branch until 1912, when the SCB opened its branch in the same building as the Yu Seng Heng Bank (or the subsequent Siam-Chinese Capital Bank), at the port on Ratchawong Road.
Thus The Siam Commercial Bank is regarded as the first bank to implement the branch-banking system in Thailand. Besides normal banking services, the SCB introduced the first “saving account service” in 1910. This encouraged people to save their money for use in case of emergency and also enabled the bank to generate strong cash flows.