After World War II, the government separated the Government’s Savings Bank from the ministerial system. The Government’s Savings Bank Act was promulgated in 1946 and the bank has been an independent organization since 1947.
The Siam Commercial Bank terminated its savings account service after the Government’s Savings Treasury was established in 1913 to promote savings more widely among the people. To support the government’s new banking business, the SCB turned its focus to expanding in provincial areas. To cater for the trade centres in the south and the north of the country, it decided to open branches at Tung Song district, which was a railway junction in Nakhon Sri Thammarat province in 1920, at Chiang Mai in 1927 and Lampang in 1930.
These branches were intended to facilitate and provide financial services to the mining business in the south and the forestry, sawmill, tobacco, tobacco curing businesses and other trades along the northern boarders.
The worldwide economic depression led to administrative changes in Thailand in 1932 and the Khana Rat government put forward policies to provide support and loans for basic private industries. Coupled with a general trade recovery, Thai exports increased and the commercial banking business thrived again. A number of Chinese merchants and business owners applied for licenses to establish banks as follows:
Liew Yong Heng Bank, Ltd. 1933
Hai Shua Bank 1933
Kuang Ko Long Bank 1933
Wang Li Chan Bank, Ltd. 1933
Sun Li Bank, Ltd. 1933
Tan Pang Chun Bank, Ltd. 1934
Thai Pattana Bank, Ltd. 1934
Sun Hok Seng Bank, Ltd. 1938
Asia Bank for Industry and Commerce, Ltd. 1939
Siam City Bank, Ltd. 1941
These new banks were operated by businessmen who had experience in or had benefited from the “Pouy Kuan” business, a money transfer service with China. However, they were short of skilled banking staff, had limited capital and lacked links with other businesses.
Therefore, these banks soon faced similar problems to what had occurred previously and many had to terminate their operations or saw their licenses withdrawn. Only banks that had good administration and large capital bases managed to overcome the obstacles and survive.
During World War II only a few Thai banks, one of which was The Siam Commercial Bank, stayed open for business. The SCB had to be fully responsible for commercial banking services in the country. The Japanese armies occupying the region required large quantities of military supplies and raw materials and a financial system was needed to address these needs.
The Japanese military made several requests to the Thai government, one of which was that the government establish a central bank to act as the government’s financial representative. In order to make the country financially independent, the Thai government therefore decided to establish the Bank of Thailand.