Banks may tone down ads after talks
Commercial banks will consider toning down their advertising if after reviewing the ads they deem them likely to encourage people to overextend themselves by taking out loans.The move follows talks yesterday between the Bank of Thailand and banking execut
Kasikornbank senior executive vice president Teeranan Srihong said after meeting that although the central bank was not coming up with specific measures to tackle the issue, it was worried that banks’ media spots could be encouraging people to overspend.
KBank will review its advertising, regardless of the BOT’s concerns. It will consider toning down any ads seen as overstimulating demand for loans, he said. “The robust growth of consumer lending this year is partially driven by the government’s domestic consumption schemes and the campaigns of financial institutions. However, we have not seen any unusual signs, with each house having measures to control its non-performing loans. The BOT’s concern about NPLs is in regard to their expected level in the future, but we believe we can control our NPLs,” he added.
Oranuch Apisaksirikul, CEO of Tisco Financial Group, said the central bank yesterday shared its outlook for the economy next year with local banks, and there were no risk-watch issues for the banks. As to advertising, the BOT asked for cooperation from banks in toning down any ads in which easy loan approval is highlighted. It also suggested banks should also educate the public about the need to save, said the chief executive.
Deputy Governor Salinee Wangtan said the BOT required commercial banks to review, and if necessary change, any advertising that encouraged overspending.Consumer spending and saving should be balanced, she added.
Moreover, the BOT asked the banks to extend the delayed process for refinancing and the withdrawal of collateral after customers repaid debts. They have agreed to improve the process at both the banks and their subsidiaries, she said.
However, although the BOT has no power to oversee the advertising of non-bank lenders, their ads are unlikely to have as much impact as those of banks given their market share of below 10 per cent, she added. The BOT acknowledged that even though the banks had been encouraging people to overspend, and consumer lending had expanded rapidly, the stability and quality of bank loans was in a good ratio, said Salinee.
