BANGKOK, July 21. (Reuters) – The central bank of Thailand is discussing interest rate cuts on some consumer loans amid fears that lenders will ditch high-risk borrowers and push them into moneylenders, a governor’s aide said Wednesday.
Last month, Prime Minister Prayut Chan-ocha asked the Bank of Thailand (BOT) to revise its credit card and personal loan interest rate ceiling to help debtors and deal with high household debt, which has increased pressure on banks.
“We are still thinking whether we will cut (rates) or not. We must consider the pros and cons, ”Assistant Governor Tanyanit Niyomkarn said at a briefing.
If interest rates are lowered, she said, high-risk debtors who already pay the highest interest rates will be pushed out of the financial system in favor of moneylenders who lend at extremely high rates.
Last year, BOT lowered the rate ceiling for credit cards from 18% to 16% per year and for personal loans from 28% to 24-25% to help debtors cope with the COVID-19 outbreak.
BOT plans to announce banking fees rules this quarter that are fair and better reflect the actual costs incurred by lenders, Thanyanit added.
Reporting by Satavasin Staporncharnchai Written by Oratay Srining Editing by James Pearson
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