Thai government asks Tsenbank to revise rates on credit cards and individual loans



From Oratai Siring, Kitifong Taichareon, Satavasin Staporncharnchai, Reuters News

BANGKOK – The Thai government has asked the central bank to revise interest rates on credit cards and personal loans to try to tackle high household debt, its prime minister said Tuesday, causing bank shares to plunge.

Prayut Chan-ocha said a number of measures prepared to address debt problems include reducing the burden of interest rates on the population, adjusting debt repayment and promoting competition for lower interest rates.

The central bank has been asked to revise the interest rate ceiling and monitor credit cards, personal loans and car loans, he said.

“If our people still have a lot of debt at a young age, it will affect their entire lives,” Praut said at a briefing after the cabinet meeting.

Household debt in Thailand stood at 14 trillion baht ($ 449.87 billion) at the end of December, equivalent to 89.3% of gross domestic product (GDP), one of the highest in Asia.

As a result of this move, bank shares fell 1.2% in early afternoon trading, Kasikornbank fell 2.3% and Siam Commercial Bank a decrease of 1.9%. Analysts believe that the rate cut will have a negative impact on banks’ earnings.

Last year, the central bank cut its interest rate ceiling on credit cards from 18% to 16% per year and for personal loans from 28% from 24% to 25% to help debtors cope with the fallout from the coronavirus outbreaks. (1 dollar = 31.12 baht)

(Reporting by Orathai Sriring, Kitifong Taichareon, Satawasin Staporncharnchai; editing by Martin Petty) ((; +662 0802309;))


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