18 February 2010
Act on the undertaking of finance business,
securities business and credit foncier business,
BHUMIBOL ADULYADEJ, REX.,
Given on the 8th day of May B.E. 2522;
Being the 34th Year of the Present Reign.
His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that:
Whereas it is expedient to enact a law on the undertaking of finance business,
securities business and credit forcier business;
Be it, therefore, enacted by His Majesty the King, by and with the advice and
consent of the National Legislative Assembly functioning as both Houses of Parliament, as
Section 1. This Act shall be called the “Act on the Undertaking of Finance
Business, Securities Business and Credit Foncier Business, B.E. 2522.”
Section 2. This Act shall come into force on and from the day following the date
of its publication in the Government Gazette
Section 3. All other laws, rules, regulations and notifications in so far as dealing
with matters governed by this Act or being inconsistent with its provisions shall be replaced
by this Act.
Section 4. In this Act,
“Finance business” means the business of procuring funds and using such funds
for any kind of business operation, which may be categorized as follows:
(1) Business of finance for commerce;
(2) Business of finance for development;
(3) Business of finance for disposition and consumption;
(4) Business of finance for housing;
(5) Other types of finance business as prescribed in ministerial regulation.
“ Business of finance for commerce” means the business of procuring funds
from the public and lending them for short-term periods including acting as acceptors, givers
of aval, or interveners for honor of bills which is done in the ordinary course of business.
“Business of finance for development” means the business of procuring funds
from the public and lending them for medium and long-term periods to industrial, agricultural
or commercial undertaking which is done in the ordinary course of business.
“Business of finance for disposition and consumption” means the business of
procuring funds from the public and engaging in the following activities in the ordinary course
(1) the lending of money to finance disposition of goods, the payments for which
are to be made on the installment or hire-purchase basis;
(2) the lending of money to the public to finance purchase of goods from any
business which is not of its own;
(3) the letting under hire-purchase agreement to the public of goods for which
the ownership has been transferred from a business which sells or distributes such goods
after agreements have been made for the hire-purchases of the same, or the letting under hirepurchase
agreement to the public of goods which have been repossessed from other hirepurchasers;
(4) the acceptance for value of transfers of claims arising from dispositions of
“Business of finance for housing” means the business of procuring funds from
the public and engaging in the following activities in the ordinary course of business:
(1) the lending of money to the public to finance acquisition of ownership of
land and/or dwelling houses;
(2) the lending of money to finance acquisition of lands and/or dwelling houses
for the purpose of selling or disposing of the same on hire-purchase to the public; or
(3) the acquisition of lands and/or dwelling houses for the purpose of selling and
disposing of the same on hire-purchase to the public.
“Procuring funds from the public” includes borrowing money or accepting deposits of money from the public.
“Certificate of deposit” 2 means a negotiable instrument issued by a finance
company to a depositor as evidence of accepting deposits of money and as representation of
the right of the holder of such negotiable instrument to have the money repaid at the end of a
fixed period, with or without interest specified therein.
“Lending of money” in respect only of the finance business, includes the
purchasing discounting or re-discounting of bills, other negotiable instruments of credit
“Lending or money for short-term periods” means the lending of money
repayable on demand or at the end of a fixed period not exceeding one year from the date of
“Lending of money for medium-term periods” means the lending or money
repayable at the end of a fixed period which exceeds one year but does not exceed five years
from the date of lending.
“Lending of money for long-term periods” means the lending of money
repayable at the end of a fixed period which exceeds five years from the date of lending.
“Capital funds” means
(1) the paid-up capital, including share premium received by a company and
money received by such company as result of issuance of certificates representing the rights to
buy shares of such company;
(2) statutory reserve;
(3) reserves appropriated from net profits at the end of each accounting period in
accordance with the resolution of the shareholders general meeting or the Articles of
Association of such company, excluding reserves for the diminution in value of assets and
reserves for repayment of debts;
(4) net profit after appropriation;
(5) reserve arising from assets revaluation, other reserves; and
(6) money which a company receives by issuing a long term debt instrument
with a term to maturity of over five years and with right ranked after ordinary creditor.
For the capital funds under (1), (2), (3) and (4), losses incurred in all previous
accounting periods shall be deducted first and the goodwill shall be deducted in accordance
with the rules, procedures and conditions prescribed by the Bank of Thailand.