Yes I'm very aware of that. It's odd however that since SWIFT is owned by its members who benefit and profit from its use, two members who can and do interact and settle with all other members via SWIFT,  chose not to interact with each other, I'm trying to understand the reason why that should be. HSBC customers wanting to transfer funds to BB Thailand must now pay a £35 charge to another UK bank, Nat West and that seems peculiar since both BB and HSBC are global banks, both having a presence in some form in both countries, Thailand and the UK. 

This is not for me it's just an issue I'm trying to understand. But Transferwise.....it's OK for transferring in but they can't transfer out, not allowed to by BOT.

They do not settle via SWIFT. SWIFT doesn't touch cash at all; SWIFT is nothing other than a messaging service.

Within an individual country settlement is typically facilitated by the central bank. So, for example, in the UK most (if not all) banks have accounts with the Bank of England. Settlement is done via the BOE accounts. So, each bank only needs one account with the BOE to settle with any other bank.

When you go international, things are much more complex. It's impossible for a bank to have an account with all the other banks with which a transaction may need to be settled. In practice a bank may have a few accounts with overseas banks with which they will deal with directly (or it may have none). They then also have accounts with a small number of other banks which act as intermediaries. Consider, for example, a New Zealand bank wanting to transfer money to a UK bank. They'd simply need a relationship with a UK bank (the correspondent bank), which could, on their behalf, settle with any UK bank via the BOE.

It costs a bank money to maintain accounts with other banks - particularly foreign ones. HSBC's decision to terminate its direct relationship with Bangkok Bank may simply be a commercial one of too little business (and hence profit) to make it worthwhile maintaining the direct relationship.

A correspondent bank is a bank in another country that provides certain financial transactions and services to another bank in another country. Decent definition and overview here:

www.investopedia.com/ask/answers/071715/what-role-does-correspondent-bank-play-international-transaction.asp

So someone like HSBC could pick one or more correspondent banks in Thailand to handle these services/transactions there. In the past it seems BBL was (one of) HSBC's correspondent banks in Thailand. They may / may not have had other correspondent banks. If they did though they wouldn't have every bank in Thailand as a correspondent bank though. Just one or maybe a handful. I mention this just because SWIFT was mentioned above. While most banks in Thailand will be SWIFT members, most banks would not have been correspondent banks for HSBC. Even though technically HSBC could send SWIFT messages back and forth to them, they would not necessarily be the bank(s) HSBC wanted to provide transactions/services for them, which is what a correspondent bank does.

I suspect it's commercial reasons behind it all that HSBC no longer wants to have a correspondent bank in Thailand. (If that is indeed the case - I haven't checked it out). Instead just route business via NatWest. Possible that they just decided that it was more cost-effective. Could be from the point of view of how much business they do, increasing regulatory/ admin costs, or simple general cost cutting. i.e any number of reasons any likely in combination. If you think of all the countries in the world, and then think of all the banks you could choose to be a correspondent bank or not, that's a lot of possibilities and combinations. That someone changes their correspondent banks from time to time isn't a big surprise.

Now HSBC no longer has a retail presence in Thailand, I suspect there's also less demand from its customers in relation to Thailand. So all in all likely a commercial decision

Yes HSBC isn't part of the Thai clearing systems. So it needs to either 1) have BBL or someone else provide the transaction clearing and currency conversion on its behalf. So if someone sent money from HSBC UK to their Thai Tisco account in Thailand it could possibly have gone thru BBL first; or 2) they now route it thru Nat West in the UK. Nat West in the UK now sorts out all the routing via Thailand

It isn't an easy thing to explain in a few sentences to be honest. As mentioned above, if you think of all the banks in the world, all the different countries, all the different currencies and all the different payment systems in use then there are a lot of combinations. So to know what exactly the cause is for this change (if indeed it has changed at all) is going to be difficult for anyone outside HSBC and/or BBL.

What you can say, if there's a starting and ending bank, a key element is if they have a direct relationship with each other. If they don't correspondent bank(s) needs to come into play.

The article below explains some of it quite well. Not all, as there are a few other dimensions, but is a decent overview of some of the factors. You need to read the entire article though as what they explain near the start isn't really what happens and is just building the picture.

gendal.me/2013/11/24/a-simple-explanation-of-how-money-moves-around-the-banking-system/