The Thai Bankers Association plans to establish a fraud unit to pool information and resources for the banking sector.

The new unit will allow Thai banks to share experiences of both internal and external fraud, said chairman Apisak Tantiworawong.

Local banks currently lack a central database for fraud and better co-ordination will improve preventive measures, he said.

A spate of fraud cases has recently hit local banks, including an alleged record 400-million-baht embezzlement at the Government Housing Bank. Computer crimes, including fraud through credit cards, ATMs and electronic banking, have also been rising in recent years.

But Mr Apisak, also the president of Krung Thai Bank, said local banks' fraud prevention has been enhanced by new practices and by the introduction of more comprehensive risk management systems.

The adoption of the Basel II capital accord is another factor pushing banks to improve risk management practices. Under the accord, banks must consider operating risks when calculating their minimum capital.

Siam Commercial Bank and Bank of Ayudhya have moved to set up dedicated fraud departments to monitor security risks. Other banks, including KTB, leverage their existing risk management and audit functions to monitor the issue.

SCB established its fraud department in 2005, said executive vice-president Pongsit Chaichutpornsuk. The bank has achieved tangible success in reducing fraud and losses over several years, he said.

The bank now plans to upgrade its IT to improve its branch monitoring system and its oversight of electronic banking services.