Thai central bank ramps up steps to cut 91% household debt ratio
THE Bank of Thailand (BOT) is rolling out more measures to ensure the success of a debt restructuring to reduce about US$454 billion in outstanding household obligations.
The central bank will conduct unscheduled visits to make sure that lenders are offering reasonable and realistic debt solutions to their customers, according to a BOT statement on Wednesday (Mar 13).
Banks found failing to comply must immediately correct their course of action or be liable for penalties, it said.
Starting Apr 1, the central bank will also ask all commercial banks and almost 100 non-bank lenders to offer a new restructuring programme for debts classified as persistent.
Borrowers for such debt will be given a chance to settle their obligations within five years, at an interest rate not exceeding 15 per cent, compared to a 25 per cent standard charge, the statement said.
Household debt in Thailand is among the highest in Asia, peaking at 96 per cent of gross domestic product in 2021 before easing to about 91 per cent, putting pressure on Prime Minister Srettha Thavisin to address the longstanding issue with several measures.
The premier has also pressured the central bank to lower borrowing costs to ease the debt burden, a strategy that the BOT said could even worsen the problem. BLOOMBERG
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