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Thai's Govt Savings Bank under-fire for lending funds to rice-pledging scheme

Angry customers reportedly took their deposits out of Government Savings Bank in protest against the bank's funding to the rice-pledging scheme.

BANGKOK: Some Thai rice farmers who participated in Thailand's beleaguered state rice subsidy scheme have finally been paid after the Government Savings Bank gave the government a loan.

However, that has led to a run on the bank on Monday. Angry customers reportedly took their deposits out of the bank in protest against the loan, especially in Southern Thailand, a region closely aligned to the opposition.

The troubled state rice pledging scheme has continued to plague Prime Minister Yingluck Shinawatra's government as rice farmers escalate their protest in Bangkok, besieging the Prime Minister's temporary office.

The government said they will pay the US$4.3 billion owed to the farmers within eight weeks but it is unclear how they will do so.

The Government Savings Bank, which agreed to lend US$619 million to help facilitate the delayed payment, is suffering from backlash from its own customers.

After the news broke about the loan agreement, the Bank's President said that over US$929 million had been withdrawn from the Bank over a period of two days.

And while the Bank's Director claims this hasn't yet affected the bank's liquidity, it will be more difficult for the government to find sources of finance for its rice scheme.

With the Election Commission still unable to set new election dates, it looks like Yingluck's caretaker government will be in political limbo for quite some time, as it continues to face pressure from anti-government protests.

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