MOF of Thailand Requires Five State Banks to Help Debtors with NPLs
Thailand's MOF (Ministry of Finance) has asked the Bank for Agriculture and Agricultural Cooperatives (BAAC), Government Savings Bank (GSB), Government Housing Bank (GH Bank), Small and Medium Enterprise Development Bank (SME Bank) and the Islamic Bank of Thailand to help debtors with NPLs so they can repay their debts on time to ensure financial stability.
Arkhom Termpittayapaisith, Tailand's finance minister, said the government is ready to pay compensation to government banks if their NPLs have risen as a result of government policies.
"We will not let government banks spend all their money to help debtors as they must reserve cash in line with the BOT (Bank of Thailand) rules and maintain liquidity similar to commercial banks," he said.
Arkhom said a variety of methods, such as granting debt moratorium and launching projects to generate income among debtors, will enable debtors to repay their debts as usual.
GSB and BAAC reportedly have the highest NPLs among the five state banks as they have already helped a number of debtors.
Arkhom pointed to BAAC saying the lender has granted loans to 10 million debtors with NPLs to enable them to generate income from additional occupations such as growing vegetables.
"This move may make NPLs rise, but government banks must know their customers, not just the amount of their debt, but also their problems," Arkhom said.
Source: Regulation Asia
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