Thailand urges financial institutions and commercial banks to implement debtor debt restructuring policies instead of extending the repayment period debt repayment.
The Office of Fiscal Policy (OPF) has urged state financial institutions and commercial banks to implement debt restructuring measures aimed at reducing the burden of debt repayment. OPF Director General Pornchai Thiraveja stressed the importance of reducing the repayment burden rather than just extending the repayment period, saying the approach is intended to accommodate debtors’ repayment capacity and contractual obligations.
The Thai Ministry of Finance requires that the implementation of debt restructuring procedures become a performance indicator for state financial institutions. In addition to promoting financial education on lending, finance and debt management, the ministry holds a debt mediation event where financial institutions collaborate to modify debt for people experiencing repayment problems. So far, some 413,000 people have signed up for debt restructuring programs.
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The OPF, the Bank of Thailand and related organizations also collaborated on the drafting of a royal decree regulating the hire purchase of cars and the leasing of cars and motorcycles to protect consumers and reduce household debt risks. The decree establishes a maximum effective interest rate for purchase and sale operations in installments, with a cap of 10% for new cars, 15% for used cars and 23% for motorcycles.
The ministry holds a debt mediation event where financial institutions collaborate to modify the debt of people experiencing repayment problems
The central bank has also set a goal of reducing Thai household debt to less than 80% of GDP to reduce financial and economic risks. In the fourth quarter of last year, household debt stood at 15.1 trillion baht, which was 86.9% of GDP.
