SFI Supervision
23. The regulatory framework for SFIs is complex, with responsibilities divided between
the MoF and the BoT. The Fiscal Policy Office and the State Enterprise Policy Office in the MoF act
as the policymaker and owner, respectively. The supervision and regulation of SFIs were transferred
to the BoT in 2015. The BoT is designing a tailored prudential regulatory framework reflecting the
SFIs’ mandates, government policies, and functions. This could lead to forbearance and/or loosening
of standards.
24. Establishing a neutral regulatory and supervisory framework for commercial banks
and SFIs is important. Despite the general perception that the BoT is supervising SFIs as
commercial banks, there are significant differences between SFI and commercial bank supervision.
The BoT needs approval of the MoF to issue regulations related to SFIs and to take corrective
actions. These requirements constrain the operational independence of the BoT. The three largest
retail deposit-taking SFIs should be brought under regulation and supervision at par with those for
commercial banks. A road map with milestones would facilitate the transition over 3–5 years.
C. Insurance
25. Insurance supervision has evolved significantly over the past decade (Annex II). Major
improvements include the development of qualified and effective supervisory staff, the
implementation of stronger supervisory requirements, an effective risk-based supervisory
framework, and enhanced information exchange and cross-border cooperation. Areas for additional
improvements include:
•
Enhancing the operational independence of the OIC. The MoF should not be allowed to
override any decision of the OIC, and all commissioners should be appointed based on technical
qualifications rather than their positions in other government organizations. In addition, the OIC,
rather than the Minister, should be given the authority to set fee levels on the industry.
•
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