BANGKOK, Aug 21 (Reuters) - Thai Finance Minister Korn Chatikavanij said on Friday he expected to give his approval this month for the central Bank of Thailand to go ahead with its planned sale of a stake in Siam City Bank (SCIB).
Approval should be made before the central bank's rescue arm, the Financial Institutions Development Fund, meets this month, Korn told reporters.
The FIDF owns 47.6 percent of SCIB, the country's seventh-largest bank, and it needs government approval from the ministry which is responsible for FIDF's debt.
Thanachart Capital's banking unit, TBANK, 49 percent owned by Canada's Bank of Nova Scotia, has expressed interest in bidding for the stake.
Scotiabank is keen to merge SCIB with TBANK, the country's largest car loan lender. TBANK is also 50.9 percent owned by its parent firm, Thanachart Capital.
Other foreign banks, including HSBC and Barclays , have been reported as potential buyers.
SCIB shares were up 0.97 percent at 20.90 baht at 0840 GMT, while the overall market was up 0.4 percent higher.
Recent changes to Thai laws allow foreign banks to raise stakes in the sector to up to 49 percent, from 25 percent previously. Holding more than that level requires additional approval.
On Thursday Korn said the ministry had not received any formal bid for its 22.56 percent stake in TMB Bank, but would be prepared to consider a proposal amid speculation the government would sell the stake to TMB's major shareholder, Dutch financial group ING..
In June, Bangkok Bank was reported to have reached an agreement on a 19 percent stake sale in ACL Bank with Industrial and Commercial Bank of China (ICBC).
But it needed government approval as ICBC was seeking a larger stake in ACL, and wanted to launch a tender offer for other shares.
ACL is owned 30.6 percent by the Finance Ministry. ICBC has been in talks about buying a 49 percent stake from existing shareholders of the small Thai bank since October 2007, but the global financial crisis intervened and delayed an agreement.
(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Alan Raybould and Jason Szep)