Bank error - in my favor!

[rookie]

Bank error - in my favor!

 

On March 20th I went to the branch of theThai Military Bank located on 2nd Road, near Pattayaland-2.

 

I went to re-deposit $1600 in US funds that I had previously acquired from the bank, as I was soon to renew my Visa.

 

The reason I had US currency was that back in March '06, when the Baht exchange rate had dropped to 37:$1, I had that bank convert money

I had previously deposited in my account (in Sept '05) at exchange rate or 41:$1, back into US dollars. I made a small profit on the exchange.

I had hopes that the Baht exchange rate would again increase and I would re-deposit the US dollars and again make a small profit. As we all know, the Baht continued to decline, so I just continued to hold onto those US dollars I had obtained from the bank. As I hadn't been back to the States in nearly 4-years, this was the only US currency I had in Thailand.

 

I gave the teller the $1600-US, and she gave it to a man in the exchange booth. The man returned and handed back two of my the $100 bills, and

said that they didn't seem to be genuine. I asked what was wrong with them and said 'but they came from your bank', indicating the exchange dates in

the my bank book. He didn't understand due to language difficulties. He also gave the teller a slip for the $1400 dollars he had converted back

into Baht and she entered the amount into my bank book.

 

It wasn't until later that night, when I had my reading glasses on that I reviewed the receipt for the transaction. I was shocked! The man in the exchange booth had inadvertently keyed in the amount of dollars being exchanged as $14,000, _not_ the $1,400 he had been given. So the exchange booth receipt and my bank book reflected a deposit of 487,200-Bt rather than the correct amount of 48,720-Bt!

 

I planned on going to the bank the next day and let the error be corrected.

 

Early the next morning, the phone rang. It was a lady from the bank, who spoke very minimal English, seeking to inform me of the error. I told her I was aware of the problem and would go to the bank that afternoon, at 2pm, to have the error corrected. I told her (in my marginal Thai) that I wanted to meet with the branch manager and have someone there who spoke Thai and English. I wanted to know why they had claimed that the $200 in US currency I had sought to exchange was questionable. I also wanted to tell themanager that I hope the Thai man in the exchange booth, as well as the teller not be fired for the error. I'd read on "Thai-Visa" that such can happen to Thai employees when errors are made, even if the error is later rectified.

 

I arrived at the bank, with my bank book in hand. The manager was not there and the _only_ person who spoke any English was the same lady who had phoned me. We were standing in front of one of the tellers, along with two other bank employees. The lady was insistent that I hand her my bank book so the error could be corrected. I said I first want to understand what was the problem with the two $100 bills I had in hand, that they said might not be genuine and explained they had come from their bank. With her limited English she repeately said she didn't understand. Yet she did look at the US notes and said they did not have a small colored stamp which is placed on all currency the bank receives through the exchange

booth. She continued to insist I hand her my bank book so the error could be reversed. She was becoming quite surly about it and was indifferent about my question about my 2 $100 bills! Out of frustration I said I'll return the next the morning, bringing someone who speaks Thai and English, and I want to speak to the manager. I had been told the manager speaks Thai and no English. Back home, I looked at the other US notes I still have in my possession from the earlier bank exchange and found a minority of them had no stamp what-so-ever. Of course, Thai's never make mistakes....they just 'save face'.

 

The next morning, the few local business owners I phoned which I know are fluent in both languages all happened to be Bangkok on business. Alas, I was unable to find someone who could assist me with communications, so I just went to the bank and handed my bank book to the lady who had been so surly the prior day and let the amounts be corrected. Once done my bank book was returned. There was no 'thank you' for responding so quickly to correct their error...it was almost like I had committed the bank error. well, 'This Is Thailand' and I guess I'd better start taking my reading glasses whenever I go banking!!

 

Addendum: I can understand that the bank would question whether the two $US bills actually were obtained from their bank. I tried to show them the

entries for the indicated exchanges in my bank book, to at least substantiate that the bills could have come from their bank. They had no interest in looking at the entries for the exchanges. I also asked them why they felt the two bills were questionable and what they felt was wrong with them. Again they just ignored

my request. Their only concern was rectifying their error and they were completely indifferent about my concerns. So much for customer service!!

I wonder if they would be as indifferent if my long term account with the bank had belonged to a Thai? ;-)

 

Lastly, I subsequently took the two notes to another bank and they were

readily exhanged into Baht...!!

 

[jitagawn]

Rookie don :smirk: teenk to mutt.

[was_usvirgin]

Yeah, I was waiting for the punch line where you got 10 x the money you deserved.

 

But just getting a fair exchange can be a victory, I suppose.

[Lord Toad]

Years ago I had a situation at a Bank in the UK. In those days I employed a load of casual staff and on Fridays I went to the bank and took out cash to pay them. I also included money for my week end. I went round paying people, amount finalized when I saw them, and then had a usual weekend. I was surprised that my money did not run our as usual and concluded I must have had more money than I thought.

On Tuesday the bank rang me and said there had been a mistake which I eventually concurred with saying I was not sure but I thought there must have been. I went back to the bank on Friday and was ushered into the managers office. He was not amused and adopted the attitude I must have known there was a mistake and should have reported it. I was pissed off because it was not until Sunday evening I even thought there might be a mistake.

Funnily enough I knew another guy, who worked for me, at that time who had bank error in his favour when he found an extra £2,000 in his account. Being young and a bit of drop out he promptly spent it. When the bank found out he was in big trouble and threatened with being charged with theft as he took the money knowing it was not his!

Banks never apologies: it is your fault or a misunderstanding!

 

[was_usvirgin]

I know...

 

When we were teenagers, a friend of mine got back from Tahiti and went to the bank to change some Tahitian Francs. The bank thought they were French Francs and paid him about 10 times what they were worth. According to his accomplice, as soon as he received the cash he took off running out of the bank (I wish I'd seen or filmed that).

 

By the time they got to the park, where we all hung out, they already had an ounce of hash and much of it was smoked up with enthusiasm.

 

I don't remember how jungle drums worked in those pre-mobile phone days, but the bank got in touch with the dad post-haste and the next thing you know my friend was trying to figure out a quick explanation. As you can imagine, we were not much help.

 

I didn't want to be in my friends shoes, at that moment (partly because our parents were also best friends). Bottom line, bank got their money back, we got stoned, and my buddy wasn't allowed out for a while. At least he still had a good bit of hash with him to tide him over.

 

 

[matta330]

Were the bills in question 1996 $100 bills? I know many Thai banks that won't takes those in exchange since those are the most counterfeited of any US bill. When I travel to BKK now, I make sure that any US $100 bill I have is 2000 or later and does not have any stamps or writing on them. Luckily one of the tellers at my local bank here is Thai and doesn't give me a hard time about being so picky about the bills I get.

[Gadfly]

I am surprised it wasn't worse and you weren't arrested. Because I work in a Thai bank, I know they never make mistakes. Never happens - really.

 

Banks here are a world unto themselves: insular, isolated and above reproach. And the higher you go up, the worse it gets.

 

Your little experience provides a glimpse into a world that outsiders - even Thais outside the banking community and foreign businesspeople who have been here for years - generally don't really understand. And you saw only a tip of the iceberg.

 

To put this into a larger perspective, bear in mind that local banking practices were the primairy cause of 1997 meltdown. Thai owned banks lent to the friends of Thai owned banks on the basis of connections and little else. When borrowers failed to pay, they simply extended the terms. This went on years, creating a house of cards that would eventually have to collapse.

 

When it did, over two-thirds of the loans held by Thai owned banks were bad. By contrast, only 11% of the loans held by foreign banks operating in Thailand were bad (and measured by much stricter standards than Thai banks). You have to ask why the difference? Why did the practices of Thai banks lead to six times as many bad loans?

 

Thailand promised to open up the financial sector to foreign competition to held clean up the domestic banking sector, but never followed through on those promises. They allowed four totally bankrupt banks to be sold, but now there are efforts to get them back in Thai hands because they were sold "too cheap". (It is popular now to blame the IMF, etc., for that debacle, even though they came in after the crisis.) The problems you saw in the mid-90s before the collapse have re-emerged. Memories are short here. The culture never changed; there was little real reform.

 

Everyone has forgotten, or wants to forget, how the insular Thai banking community created a financial crisis that wiped out the Thai economy. Thai banks never make mistakes. Take a look at the capital controls the Thai central bank imposed, which immediately caused the Thai stock market to collapse.

 

All of these people know and support each other. Like I said, you saw only the tip of the iceberg.

[Flashermac]

<< I wonder if they would be as indifferent if my long term account with the bank had belonged to a Thai? >>

 

Unless you were somebody "important", being Thai wouldn't make any difference with the bank.

 

 

[Flashermac]

<< I know many Thai banks that won't takes those in exchange since those are the most counterfeited of any US bill. >>

 

Times have changed! I remember when the most counterfeited was the US$20. I did get handed a fake US$20 in Bangkok once. I could tell immediately by the paper, but how many shopowners could?

 

p.s. I've seen bars reject Canadian dollars, since they apparently didn't even know Canada was a country. They thought it was a drink (Canada Dry).

 

 

[HeartThais]

As usual, another complete distortion/disregard of facts. Although I'm beginning to think you aren't doing it on purpose.

 

"To put this into a larger perspective, bear in mind that local banking practices were the primairy cause of 1997 meltdown."

 

This is just flat-out wrong and typical propaganda that has no support from the economic community. Please explain to me how the same cronyism that was in place for several *decades* prior to the crisis, that saw the most rapid real GDP growth termed the Asian miracle, suddenly fell apart and was responsible for the downfall. Does it not strike you as just a wee bit more likely that the Asian crisis had to do with a more recent Asian trend... like say... financial liberalization?

 

"When it did, over two-thirds of the loans held by Thai owned banks were bad."

 

Most people accept that prior to the crisis, the non-performing loan rate was between 7% (official BOT accounts) and 25% (highest estimates from an IB - JP Morgan).

 

"By contrast, only 11% of the loans held by foreign banks operating in Thailand were bad (and measured by much stricter standards than Thai banks). You have to ask why the difference?"

 

Do you know what % of assets were held by foreign banks prior to the crisis or what the state of foreign banking in Thailand was? Thailand prior to 1997 had very strict foreign bank rules which they were forced to relax as a direct result of the crisis. Total ownership of assets owned by foreign banks were less than 9% prior to 1997. Those foreign banks did very little retail banking meaning didn't accept deposits from Thais and did not generally lend to Thai companies. They mostly did business with international companies meaning they took deposits in foreign currency, exchange the currency for baht to give to the company but expected repayments in foreign currency. This will become a very big issue later on.

 

"Why did the practices of Thai banks lead to six times as many bad loans?"

 

First, they weren't in the same business. Second, they were better money managers. Third, and most significant by far, Thai banks were taking deposits in foreign currency and lending baht taking on massive forex exposure. But they didn't realize it was massive forex exposure because they thought the government was pegging the Baht. This was a direct result of the recent liberalizing of the financial system and the recommendations of the IMF. What would you do if a foreigner came to you begging to deposit money into your bank? Refuse them because they didn't have baht? Once you take the deposit, what do you do when an economy that has been artificially supported by Japanese and foreign investments doesn't have any good investments? Do you return the money back to the foreigner or do you start loaning it out to people who can afford to borrow all that money - mainly real estate and stock market speculators. You think farmers were paying those super high interest rates to buy tractors?

 

"They allowed four totally bankrupt banks to be sold, but now there are efforts to get them back in Thai hands because they were sold "too cheap". (It is popular now to blame the IMF, etc., for that debacle, even though they came in after the crisis.)"

 

Here's the real history behind the crisis. IMF had a very big role in it. Thai banks had relatively little role.

 

1980's - Thailand grows rapidly, primarily due to Japanese prosperity and expansion of Japanese manufacturing operations in Thailand.

 

1990 - Japanese money starts to dry up. Thailand needs new source of foreign money and turns to IMF for suggestions. IMF recommends they lift capital controls, raise interest rates and peg their exchange rate in order to attract foreign capital. To do so, they sacrifice control over monetary policy. Works incredibly well. Foreign capital pours in from all directions.

 

1990s - Foreign Investment banks and funds start borrowing in foreign currencies and investing in Thailand for higher interest rates. Incredibly high capital inflows goes to sectors that can deploy the capital quickly, (i.e. stock market and real estate) instead of productive sectors like agriculture and manufacturing. Stock Market and Real estate values start to skyrocket.

 

1995-7 - Japanese recession looms. Asian growth slows. Foreign investors start getting nervous. Thailand's peg, maintained according to the IMF's recommendation to attract foreign investment, has created an overvalued baht. Thailand starts to lose exports to cheaper labor countries because they haven't improved their productivity. Thailand begins to run a trade deficit for first time in years.

 

1997 - Foreign capital runs dry. Soros sees opportunity and begins speculative attacks on Baht. BOT tries to maintain peg against attack. Asks US for help by providing a short-term loan of foreign reserves so that they can defend against the attack. US refuses and instructs IMF not to help Thailand unless Thailand agrees to get rid of all their tariffs and barriers to US trade. Thailand goes to Japan for help. Japan was going to set up Asian Monetary Fund to help asian countries in crisis. US realized it would weaken the IMF as their blackmail tool and strong-arms Japan to dropping the AMF. BOT runs out of foreign reserves and can no longer defend the peg against attack. Forced to float the baht. Baht devalues incredibly. Thai Banks that took deposits in foreign currencies and lent in baht collapse due to sudden devaluation in baht. Foreign Banks cut their losses and run but are mostly unscathed because they don't have the same currency exposure.

 

Btw, realize that the IMF masquerades as a way to help countries in crisis. It is really designed to force countries into ceding to US interests during times of crisis. Their secondary goal is to give some insurance to foreign (i.e. US) investors that may not get paid back by a bankrupt country.

 

1998 - IMF agrees to help but only if Thailand further liberalizes, intentionally oblivious to the fact that the liberalization has wrecked the economy. Places several conditions on providing relief including selling Thai banks to foreign banks, keeping interest rates high to attract foreign investors, engage in a program of fiscal austerity which is btw, exactly the OPPPOSITE of what the US does in a recession. Gee... you think the IMF might have an agenda here? Aid package doesn't come anywhere close to providing enough liquidity for Thailand to stabilize their currency. Instead, just enough to keep Thai banks afloat to make sure foreign banks are protected.

 

On side note, think of how racist the western policy is. When Europe was in great trouble, they get Marshall plan to stimulate consumption and revive the economy. When an Asian country gets in trouble, the US refuses any aid except under conditions favorable to future US trade. Plus instead of stimulating the economy, they force the Asian country to do the exact opposite, forcing them to rebuild themselves through export and not allowing them to do anything that would stimulate domestic growth directly. The scary part is that these poor countries actually do these things thinking the IMF/US are acting in their best interests.

 

And Gadfly is a perfect example of perpetuating the myths that will ensure that these countries will always be second class citizens to the US/Europe.