Bank of Thailand Gears Up for Second Round of Debt Relief, Offering Lower Interest and Debt Write-Offs

 

The Bank of Thailand (BoT) is reportedly poised to unveil a second phase of its ‘Khun Su, Rao Chuay’ – or ‘You Fight, We Help’ – initiative, according to insider sources.

 

The central bank is understood to be preparing three key measures focused on easing the burden for indebted individuals, including reduced interest rates and options for full debt settlement.

 

In a recent announcement, the BoT extended the deadline for the initial You Fight, We Help’ scheme by two months, pushing it to the end of June 2025 from the original April 30th cut-off.

 

This extension acknowledges that a segment of borrowers may still be grappling with repayments and require ongoing support through the programme.

 

Sources close to discussions between the BoT and the Thai Bankers' Association have indicated that the increasing fragility of household finances, coupled with significant economic uncertainty, necessitates continued intervention from both the government and the central bank.

 

The priority is to stem the rising tide of debt problems by offering further assistance to those facing difficulties.
 

 

The proposed ‘additional’ financial measures will come under an expanded ‘You Fight, We Help Phase 2’. This new iteration will feature three core strategies, mirroring the first phase but with a wider net cast to include more borrowers:

 

(1) "Pay Directly, Keep Your Assets" Scheme (Applicable to customers of commercial banks and state-owned financial institutions)

 

Eligibility for this measure has been widened to encompass:

• Borrowers with payments overdue by more than a year (low uptake expected due to the extended delinquency).
• Borrowers with a payment history of 1 to 30 days overdue who have undergone Debt Restructuring (DR) since January 1, 2022 (no outstanding payments required at the time of DR). The BoT anticipates significant participation here, as many commercial banks implemented pre-emptive DR, and this group was initially keen to join ‘Khun Su, Rao Chuay’.
• Borrowers with no history of overdue payments who have undergone DR since January 1, 2022.

 

The BoT estimates that around 1.06 million accounts, representing a total debt of 380 billion baht, could qualify for this initial measure. This includes 890,000 accounts from commercial banks and their subsidiaries, amounting to 250 billion baht in debt.

 

 

A breakdown of the estimated 1.06 million eligible accounts reveals:

• Borrowers with overdue payments exceeding 1 year: 750,000 accounts, 180 billion baht in debt.
• Borrowers with overdue payments of 1 to 30 days who underwent DR since January 1, 2022: approximately 170,000 accounts, 110 billion baht in debt.
• Borrowers with no history of overdue payments who underwent DR since January 1, 2022: 140,000 accounts, 90 billion baht in debt.

 

 

(2) "Pay, Close, and Be Done" Initiative (for commercial banks and their subsidiaries)

The debt ceiling for the ‘Pay, Close, and Be Done’ initiative has been raised from 5,000 baht to a range of 10,000 to 30,000 baht:

• Unsecured loans: not exceeding 10,000 baht per account.
• Secured loans: not exceeding 30,000 baht per account for vulnerable individuals with housing/SME loans up to 5 million baht, car loans up to 800,000 baht, and motorcycle loans up to 50,000 baht. Should the debt ceiling exceed 30,000 baht per account, the compensation rate from the Financial Institutions Development Fund (FIDF) will be reduced.
• Partial repayment terms will be eased.

Borrowers will still need to come forward and make a partial payment to close their accounts.This may permit payments below 10% (but at least 500 baht if the debt exceeds 5,000 baht, addressing concerns from first-phase participants about fairness).

 

The National Credit Bureau (NCB) code will be adjusted to 11, potentially allowing borrowers to make a fresh start more quickly. The specific repayment percentage will not be publicised to avoid moral hazard.

 

The BoT projects the following additional eligible borrowers for this measure:

• Without a debt ceiling: 250,000 individuals, 290,000 accounts, 3.1 billion baht in debt.
• With a debt ceiling: 200,000 individuals, 230,000 accounts, 2.2 billion baht in debt.

 

 

(3) Third Measure: "Restructuring Unsecured Loans" for Non-Performing Loan (NPL) Borrowers with Credit Lines Up to 50,000 Baht 

(Applicable to commercial banks and their subsidiaries) This involves restructuring the debt into a term loan with low monthly repayments, such as 2% of the principal.

 

This repayment rate aims to ensure manageable monthly outgoings. Following the 3-year term of the measure, borrowers could see their original debt reduced by approximately two-thirds.

 

Monthly payments will be solely directed towards the principal for three years. All interest will be frozen; if the debt is repaid, the entire interest amount will be waived. The cost will be shared equally (50:50) between financial institutions and the FIDF central fund.

 

The BoT anticipates an additional 900,000 individuals with 1.4 million accounts and 61 billion baht in debt will be eligible for this measure.

 

The Bank of Thailand is expected to formally notify the Ministry of Finance of these plans and seek their consideration for these additional debtor support measures around May 2025.

 

Subject to Cabinet approval, anticipated in June, the BoT is then expected to issue a circular detailing the additional support measures and hold a press briefing to officially announce the second phase of ‘Khun Su, Rao Chuay’. Registration for borrowers is expected to commence shortly thereafter.

 

Meanwhile, the first phase of the ‘Khun Su, Rao Chuay’ project, which ran from December 12, 2024, to April 24, 2025, saw a total of 1.6 million account registrations from 1.3 million borrowers.

 

As of April 2025, it is estimated that approximately 530,000 borrowers, representing 27% of the 1.9 million eligible borrowers, have registered and are eligible for the scheme. This accounts for 385 billion baht in debt, or 43% of the total eligible debt of 890 billion baht.

 

The National Credit Bureau recently reported that as of March, only 270,000 borrowers, or 14.2%, had fully participated in the ‘Khun Su, Rao Chuay’ project, with a total value of 300 billion baht, representing 34% of the eligible borrowers and loan amounts.