The Bank of Thailand (BOT) was first set up as the Thai National Banking Bureau. The Bank of Thailand Act was promulgated on 28 April 1942 vesting upon the Bank of Thailand the responsibility for all central banking functions. The Bank of Thailand started operations on 10 December 1942.
The Bank of Thailand Act, B.E.2485 was later amended in order to put emphasis on BOT's social responsibility, to create a mechanism to guard against economic crisis, as well as to set up BOT's decision making process to ensure good governance and transparency in the organization. Moreover, members of the public will be able to audit and increase the understanding of the BOT's operations. The Bank of Thailand Act, B.E.2551 came into force with effect from 4 March 2008.
The BOT prints and issues banknotes and other security documents under the enforcement of the Currency Act and has sole rights to print and issue banknotes in the Kingdom.
The BOT implements monetary policy as specified by the Monetary Policy Committee as follows : mobilizing the deposits, determining the interest rate for loans to financial institutions, trading foreign exchange and exchanging for the future cash flow, borrowing foreign exchange in order to maintain the monetary stability, borrowing money in order to implement the monetary policy, trading securities as necessary and exchanging for the future cash flow in order to control the money supply in the country's financial system, and borrowing or lending the securities with or without returns.
The BOT manages its assets (excluding the assets within the currency reserve according to the Currency Act) and invests such assets for returns by realizing the security, liquidity, return on asset, and management risks.
The BOT provides banking facilities to the government in terms of depository and lending facilities for the Ministry of Finance, acts as the custodian for the government, acts as the representative of the government for investment in assets and FX, trades and transfers the bill of exchange, securities, and share certificate, and controls and oversees FX. In additions, the BOT may provide banking facilities to the state enterprise or other government agencies. Moreover, the BOT acts as the registrar for the government bonds by acting as the government representative in purchasing and selling government bonds, paying principal and interest, or acts as the registrar of state enterprises, specialized financial institutions, or other government agencies.
The BOT provide banking facilities for the financial institutions by acting as lender of the last resort for the financial institutions, acting as the custodian for the financial institutions, and ordering the financial institutions to report or explain about the assets, liabilities or contingent liabilities.
The BOT establishes or supports the establishment of payment system, electronics clearing system, and administers such systems for safety and efficiency.
The BOT supervises, examines, and analyzes the financial status and performance, and risk management system of the financial institutions in order to promote financial institutions stability.