DR Vichit Suraphongchai, former president of Bangkok Bank and a member of a top-notch circle advising Finance Minister Tarrin Nimmanahaeminda on financial sector reform, may take over as governor of the Bank of Thailand, financial sources said.

Speculation has been swirling around that Vichit, also a former transport and communications minister, will keep his options open if he is approached to become the central bank governor, they said.

In recent weeks, Vichit, who spent almost 20 years of his international banking career at Thailand's largest commercial bank, has also been tipped to head a ''good bank'', a new financial institution established to acquire and manage all the good assets of the 56 closed finance companies.

''He may not be interested in heading the good bank as he appears to be more interested in the central bank job,'' one source said.

Restoring the credibility of the central bank and turning it into an effective institution which is accountable to the public is an extremely delicate task Tarrin has vowed to undertake.

The Finance minister has appointed a special panel headed by former central bank governor Nukul Prachuabmoh to investigate the central bank's handling of the Bangkok Bank of Commerce scandal, its Bt450-billion lending spree to support liquidity in the 58 earlier-suspended finance companies, and its disastrous mistake of spending US$23.4 billion in foreign currency forward contracts to defend the baht.

Chaiyawat Wibulswasdi, the present central bank governor, is expected to lose his job if he is found to have been involved in the flawed defensive policy for the baht.

Privately on several occasions Chaiyawat has denied any direct involvement in the fatal strategy to build up false foreign exchange reserves through selling the forward contracts. Other central bank officials have also sought to defend their involvement in the baht defence by saying that they were merely following ''the policy'' -- presumably the policy solely directed and implemented by former governor Rerngchai Marakanond.

Financial sources said Tarrin has relayed a message to Chaiyawat that if he was found to have been involved in the policy that led to the baht flotation on July 2, the governor must take responsibility. To this message, Chaiyawat simply nodded his head. Earlier this year, while the Finance minister was still a member of the opposition bloc, Chaiyawat told Tarrin that he had no knowledge whatsoever of the flawed policy.

Of immediate concern is how to lay to rest the banking crisis, a Herculean task that will require a more decisive leadership at the central bank. A former central bank governor expressed his disappointment at the lack of leadership by the governor and his top aides. ''They know that a banking crisis is looming but nobody appears to be making any tough decisions,'' he said.

Tarrin personally would like to fire all the top officials of the central bank responsible for the collapse of the bubble economy, but in practice it would be quite difficult for him to make it happen at a time when he is faced with financial and foreign exchange crises of a global magnitude.

With the investigation hanging over their heads, the central bank officials have been described as working in a state of paranoia, fearful of making decisions because they do not know what will happen to them.

In this tense atmosphere, it is impossible for the central bank to provide the leadership necessary to guide the country out of the crisis. As a result, financial sources said Tarrin must literally take over the central bank by giving it instructions to follow.

Central bank officials are happy to follow Tarrin's instructions because they will then not be blamed for mistakes. Yet the financial problems of the country are so severe that it will be impossible for Tarrin to muddle through if he is not supported by a strong central bank, although he is considered the best financial manager Thailand has ever produced.

''I think we need to think carefully about the role of the central bank and how it can be improved. All the talk about the Financial Sector Restructuring Authority, the good bank and the bad bank are largely emotional reactions to the present crisis. If you don't have a strong central bank, forget about tackling the financial crisis,'' said a senior commercial banker some time ago.

Instead of becoming part of a solution, the central bank is becoming part of the problem itself. It has been slow to react to and deal with the troubled Bangkok Metropolitan Bank and Siam City Bank.

It has only one monetary policy -- that is, keeping interest rates high to kill the Thai corporates. It does not mend its mistakes by settling forward contracts when the baht is relatively stronger. Now at Bt47-Bt48 per US dollar, the cost of settling the forward contracts is prohibitive.

It has underestimated the macro-economic problems arising from the financial crisis, resulting in an inadequate deal with the International Monetary Fund.

The bank does not dare to go out in the international markets to borrow money to cushion its foreign exchange reserves at a time when it needs the US dollar to prop up the baht and improve liquidity in the dried-up financial system. It has failed to help exporters with the credit they need to sell their goods in overseas markets. The list goes on.