The need for a national bank to act as the government’s financial representative had been recognized for a long time. When the Siam-Chinese Bank went bankrupt during a financial crisis in 1914, the Finance Minister considered setting up a central bank to control financial operations of the government and commercial banks.
The Finance Ministry hired Sir Bernard Hunter, an English banker, to consider the possibility of changing The Siam Commercial Bank into the Thai National Bank. He reported to the minister on 4 February 1914 and recommended that the SCB be transformed into the National Bank, as a means of developing the country’s banking system.
Since the government was not then ready to take any action, the idea of establishing a central bank was placed on hold. But when World War II broke out in Europe in 1939, the idea came back into prominence.
The government considered that the people’s fear of the war would compel them to withdraw their money from the commercial banks and large amount of withdrawals would weaken the financial status of these banks. Establishing a central bank would be a way of bolstering the stability of commercial banks.
Besides the central bank could be a source of loan capital to support government policies to develop industry and commerce. Therefore in 1939 the government set up the “Thai National Bank Office” to prepare for establishment of the central bank at a suitable time.
In 1941, shortly after the Thai National Bank Office opened for operations, Japanese troops occupied Thailand and requested the government appoint financial representatives for the central bank. The Thai government then cancelled the Thai National Bank Office and subsequently the Bank of Thailand was established.