Thai government asks central bank to review rates for credit cards, personal loans

[BANGKOK] Thailand's government has asked the central bank to review interest rates for credit cards and personal loans to try to tackle high household debt, its prime minister said on Tuesday, sending bank shares falling.

Prime Minister Prayuth Chan-ocha said a range of measures prepared for solving debt problems include reducing peoples' interest rate burden, debt repayment adjustments and promoting competition for lower interest rates.

The central bank has been asked to review the ceiling of interest rates and supervise credit cards, personal loans and auto title loans, he said.

"If our people still have a lot of debt and at a young age, it will affect their whole lives," Mr Prayuth told a briefing after a cabinet meeting.

Thailand's household debt stood at 14 trillion baht (S$596.27 billion) at the end of December, equal to 89.3 per cent of gross domestic product (GDP), among the highest in Asia.

The move sent bank shares falling 1.2 per cent in early afternoon trade, with Kasikornbank down 2.3 per cent and Siam Commercial Bank slipping 1.9 per cent. Analysts said lower rates will hurt banks' earnings.

Last year, the central bank reduced the interest rate ceiling for credit cards to 16 per cent per year from 18 per cent and that of personal loans to 24-25 per cent from 28 per cent, to help debtors cope with the impact of coronavirus outbreaks.

REUTERS