Both of your parents would need to obtain a Non-O Visa for purpose of retirement. Each will need to show the 800k baht equivalent in a bank account in his or her sole name only. It can be an Indian bank. I don't think Royal Thai Embassy has a preference for which one. Any one would do.
Upon arrival in Thailand your father needs to open a Thai bank account in his name only and transfer the 800k baht into that account. I say father for convenience, but it can be either of your parents, the point being that only one has to do this. 30 days before their 90-day permission to stay ends she needs to go to immigration and apply for a Non-O Visa Dependent (follow) based on her husband's visa. 30 days before his permission to stay ends and after having the 800k baht in the account for at least 2 months, he needs to go to immigration to get a retirement extension. Your mother should be able to apply for the same retirement extension on the basis of being a dependent on your father's extension.
The value of doing it this way is that both of your parents get a year's permission to stay but they only have to meet the financial requirements for one of them.
An example, of how this could be done in Phuket:
************************************************************