BANGKOK (Reuters) – Major Thai banks defended themselves on Thursday against criticism that they facilitated weapons purchases by the Myanmar junta, saying they lacked the capacity to investigate all transactions that may be used for such purchases.
Representatives of the lenders told a parliamentary committee, however, that they strictly followed existing regulations.
A U.N. expert’s report last month said that companies registered in Thailand utilised Thai banks to transfer weapons and related materials worth $120 million in the 2023 fiscal year to Myanmar, compared with $60 million the year before.
These transactions blunt global efforts to isolate Myanmar’s ruling junta, which is facing its biggest challenge since taking power in a 2021 coup, with an nationwide armed resistance gaining ground on multiple fronts and a wilting economy.
A junta spokesman did not respond to a call seeking comment.
Thailand’s parliamentary committee on national security called in representatives of five banks after the report by the U.N. special rapporteur on the situation of human rights 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, the banks do not have this kind of investigators,” said Pongsit, who was addressing the committee on behalf of the Thai Bankers’ Association.
All commercial banks would comply if the government and regulators makes it clear which entity they cannot do business with, he added.
The five Thai commercial banks named in the U.N. report, Krung Thai, SCBX, Bangkok Bank, TMB Thanchart Bank and Kasikorn Bank did not respond to requests for comment from Reuters.
The Bank of Thailand (BOT) said that it is working with the Anti-Money Laundering Office (AMLO) to investigate all transactions that may be linked to Myanmar’s weapon procurement.
“If there are loopholes, we and AMLO will introduce additional measures,” BOT assistant governor Chayawadee Chai-anant told the committee.
The parliamentary committee’s chairman, Rangsiman Rome, said the bankers association, the BOT and AMLO had been instructed to report back within 30 days with recommendations for further action.
Referring to the U.N. report that show a drop in weapon exports from Singapore to Myanmar between 2022 and 2024, Rangsiman instructed the foreign ministry to ask the Southeast Asian financial hub for details on its approach.
“We need to use Singapore as a model to address this issue,” he said. “If our banking system has been used to facilitate arms dealing and support the Myanmar junta in killing its people, this is something the committee thinks is unacceptable.”
(Reporting by Panu Wongcha-um, Chayut Setboonsarng and Artorn Pookasook, Editing by Devjyot Ghoshal and Raju Gopalakrishnan)
