1-baht savings bonds to debut on June 24
Scheme to improve financial access
The Finance Ministry’s savings bonds with an unprecedented face value of one baht each will be sold to the public from June 24 to Aug 14.
The small-ticket savings bonds worth 200 million baht are part of the government’s economic rehabilitation plan to encourage low-income earners to save money in risk-free assets, said Finance Minister Uttama Savanayana.
To be eligible to buy the one-baht bonds, Thai individuals aged 15 and older must sign up with the Krungthai Bank (KTB) Pao Tang e-wallet starting from June 19. The minimum subscription is set at 100 baht per investor, with investment capped at 500,000 baht.
The bonds can be sold in secondary markets after they are held for six months.
The three-year bonds carry a coupon rate of 1.70% with a semi-annual interest payment.
Should the debt instruments receive a warm welcome from retail investors, the Finance Ministry stands ready to allocate additional bonds, Mr Uttama said.
Apart from the face value of one baht, it is the first time that the savings bonds will be allocated on a blockchain-based system.
Patricia Mongkhonvanit, direc- tor-general of the Public Debt Management Office (PDMO), said bond sales through the electronic system will help cut issuance costs.
The Finance Ministry’s savings bonds regularly have a face value of 1,000 baht each. The 200-million-baht savings bond offering in smaller units is to test the waters.
KTB president Payong Srivanich said the Pao Tang e-wallet is going beyond financial services as it is penetrates the community level.
Stock Exchange of Thailand president Pakorn Peetathawatchai said the one-baht bond scheme shows that financial services can be accessed by all people.
The PDMO recently closed the sales of savings bonds worth 50 billion baht, part of the government’s 1-trillion-baht borrowing plan to alleviate damage caused by the pandemic.
The bonds were divided into five- and 10-year maturities. The five-year bonds carried an average coupon rate of 2.4%, effectively 1.9% after tax, while the longer-dated bonds had an average rate of 3%, netting 2.55% after tax.