BANGKOK (Reuters) – Major Thai banks defended themselves on Thursday against criticism that they facilitated arms purchases by Myanmar’s junta, saying they did not have the capacity to investigate all transactions that could be used for such purchases.
However, creditor representatives told a parliamentary committee that they strictly followed existing regulations.
A report by a UN expert last month said companies registered in Thailand used Thai banks to transfer weapons and related materials worth $120 million in fiscal 2023 to Myanmar, compared with $60 million in the year previous.
These transactions undermine global efforts to isolate Myanmar’s ruling junta, which faces its biggest challenge since taking power in a coup d’état in 2021, with a nationwide armed resistance gaining ground on multiple fronts and an economy in decline.
A junta spokesman did not respond to a call seeking comment.
Thailand’s parliamentary national security committee summoned representatives from five banks after the report by UN special rapporteur on the human rights situation in Myanmar, Tom Andrews, highlighted the role of Thai entities.
Pongsit Chaichutpornsuk, senior executive vice president at Krung Thai Bank, said lenders have strictly complied with regulations but find it difficult to investigate indirect transactions, such as those potentially made to buy fuel.
“This is beyond what we need to know, banks don’t have these types of investigators,” said Pongsit, who was speaking to the committee on behalf of the Thai Bankers Association.
All commercial banks would comply if the government and regulators made it clear which entity they cannot do business with, he added.
The five Thai commercial banks mentioned in the UN report, Krung Thai, SCBX, Bangkok Bank, TMB Thanchart Bank and Kasikorn Bank, did not respond to Reuters’ requests for comment.
The Bank of Thailand (BOT) said it is working with the Anti-Money Laundering Office (AMLO) to investigate all transactions that may be linked to arms purchases in Myanmar.
“If there are gaps, we and AMLO will introduce additional measures,” BOT assistant governor Chayawadee Chai-anant told the committee.
Parliamentary committee chairman Rangsiman Rome said the bankers’ association, BOT and AMLO have been instructed to submit a report within 30 days with recommendations for further action.
Referring to the UN report showing a drop in arms exports from Singapore to Myanmar between 2022 and 2024, Rangsiman instructed the Ministry of Foreign Affairs to ask the Southeast Asian financial hub for details on its approach.
“We need to use Singapore as a model to resolve this issue,” he said. “If our banking system has been used to facilitate the arms trade and support the Myanmar junta in the murder of its people, this is something the committee finds unacceptable.”
(Reporting by Panu Wongcha-um, Chayut Setboonsarng and Artorn Pookasook; Editing by Devjyot Ghoshal and Raju Gopalakrishnan)
