The move aims to reduce inequality and make room for the government to allocate budget for economic activities, BOT deputy governor Ronadol Numnonda said.

Ronadol confirmed that financial institutions were still able to grant deposit protection to up to 98 per cent of depositors.

He added that this move was in line with Section 53 of Deposit Protection Agency Act BE 2551 (2008).

“Currently, each depositor is granted deposit protection of up to THB5 million, but the protection will be reduced to a maximum of THB1 million per depositor from Wednesday, which is suitable for the current situation and in line with laws,” he explained.

He said this move would encourage depositors and financial institutions to pay attention to risk management, reduce inequality and facilitate the government in allocating budget to support economic activities.