Over 1.8 million accounts in persistent debt, owing THB75 billion: BOT

THURSDAY, MAY 23, 2024

The Bank of Thailand (BOT) has identified more than 1.8 million accounts of personal loan borrowers as “persistent debt” (PD), accounting for over 75 billion baht in total debts.

A recent survey by the central bank found that 1.33 million accounts, owing 60.8 billion baht in debt, were regarded as suffering from “general PD”, while another 480,000 accounts involving 14.3 billion baht in debts were regarded as “severe PD”, said Suwannee Jatsadasak, assistant governor of the BOT’s Financial Institution Supervision Group.

She said the survey covered 37 lenders of revolving personal loans comprising commercial banks and non-banking institutions.

The survey was conducted as part of the central bank’s efforts to help tackle the problem of chronic indebtedness among many Thais.

As per the central bank’s definition, “general PD” borrowers refers to those indebted for three consecutive years, while “severe PD” comprises those who are indebted for five consecutive years with monthly income below 20,000 baht for debtors of banks and below 10,000 baht for those borrowing from non-banking institutions.

Suwannee said that certain lenders who were surveyed failed to provide complete information regarding their borrowers.

She said the number of debtors registered to join the central bank’s debt settlement programme – which began on April 1 – was “still not high enough”. She said the bank would follow up on the programme’s implementation until the end of July.

If the number of participating borrowers remained low, the BOT would discuss with random groups of borrowers to determine possible causes as to why they ignored the programme and whether existing measures needed to be revised, Suwannee said.

“The BOT sees this project as providing an opportunity for debtors to repay all their debts quickly and greatly reduce their interest burden,” she said.

The central bank’s programme offers to reduce the interest rate of revolving personal loans from the maximum of 25% per annum at present to 15%.