Cabinet backs ‘Close debt fast, move forward’ plan to fix 2.3 million NPL accounts

The Cabinet has approved in principle the “Clear Debt, Move Forward” scheme, a joint initiative of the Finance Ministry, the Bank of Thailand (BoT) and the National Economic and Social Development Council (NESDC) to tackle bad debts weighing on households and the wider economy.

The programme aims to resolve about 2.36 million small NPL accounts with total outstanding debt of around 62.4 billion baht, allowing borrowers to close long-overdue loans more quickly, repair their credit histories and regain access to formal finance for housing and livelihoods.

AMC route to clean up bad loans

Under the scheme, asset management companies (AMCs) will buy non-performing consumer loans from banks and state-owned specialised financial institutions (SFIs), then offer flexible debt restructuring to ease the burden on borrowers.

The Cabinet assigned the Fiscal Policy Office, the BoT and related agencies to fast-track implementation and to push broader, long-term household debt solutions in parallel.

NESDC, in its opinion submitted to the Cabinet, stressed that the Finance Ministry must clearly communicate the benefits to eligible borrowers — including:

• possible partial repayment to close the account (haircut)
• instalment plans of up to three years
• full interest waiver for borrowers who comply with the agreed terms
• and credit record improvement once debts are settled under the programme.

NESDC said these points are key to motivating eligible debtors to join.

Better data and stricter, more transparent oversight

NESDC also underlined that the debt scheme will only be effective if it goes hand-in-hand with structural measures, including:

• upgrading the household debt database to cover all types of financial service providers, including non-bank lenders and savings cooperatives
• using complete data to support debt restructuring, assess credit risk properly and ensure new lending after the programme is aligned with borrowers’ real repayment capacity.

It recommended giving particular attention to the oversight of GSB’s lending in partnership with ARI-AMC and any designated AMCs, in line with the BoT’s rules for state-policy programmes, to ensure transparency and effectiveness.

NESDC also called for systematic monitoring and evaluation, with ministry and agencies reporting to the Cabinet after the scheme ends on:

• how far household debt burdens were reduced
• how well borrowers’ financial capability was restored
• and whether the use of public resources was cost-effective, to guide future household debt policies.

BoT fully supports scheme and extra help for SFIs’ clients

The BoT told the Cabinet it supports the “Clear Debt, Move Forward” scheme as a public–private cooperation to help small borrowers with relatively low non-performing balances resume debt repayment, close their bad loans more quickly and rebuild a good repayment record.

The central bank also raised no objection to additional, tailor-made restructuring measures by SFIs, noting that SFI clients are often more vulnerable than commercial bank borrowers and may need softer terms. These SFI-specific measures may include:

• allowing full principal write-downs with complete interest waivers in certain cases
• more lenient debt collection and repayment conditions than normal bank standards
• and, for borrowers with no repayment capacity, closing accounts and writing off debts.

The BoT added that sustainable household debt solutions require not only better data and credit-risk tools, but also policies to boost competitiveness and raise incomes for individuals and businesses.

It urged the government and agencies to communicate details of the scheme clearly and widely — including benefits, timelines and eligibility conditions — and to track outcomes continuously, adjusting the programme as needed to meet its targets.

Who is eligible?

The scheme targets individual borrowers whose loan status as of September 30, 2025, was:

• over 90 days past due on principal or interest, and
• whose total NPLs across all financial service providers do not exceed 100,000 baht per person.

Debts covered include:

• Unsecured loans, such as personal loans and credit cards.
• Residual debts from formerly secured loans where collateral has already been seized or cannot be recovered, but a remaining balance is still legally claimable.

Eligible creditors include commercial banks, their financial-business group companies, and SFIs.

How the help works

1. Borrowers of commercial banks and their financial group firms

Commercial banks and their group companies will sell and transfer NPLs to Sukhumvit Asset Management Co Ltd (SAM) or other designated AMCs at a mutually agreed reference price and management method.

After purchase, SAM/AMCs will restructure debt under BoT’s guidelines via two main options:

• Partial repayment to close the account (“haircut” to settle the debt in one go).
• Instalment plans of up to three years.

During the programme, interest will be frozen. If the borrower complies fully with the agreed terms, all accrued interest will be written off. Debt management after year three will be adjusted to match the borrower’s capacity.

2. Borrowers of specialised financial institutions (SFIs)

SFIs will sell NPLs to Ari Asset Management Co Ltd (Ari-AMC) or other appointed AMCs under agreed reference prices and management methods.

Ari-AMC/AMCs will then offer flexible restructuring in line with BoT guidelines to reduce the burden.

At the same time, SFIs will roll out extra targeted measures to match their more vulnerable borrowers — for example:

• closing accounts with principal reduction and full interest waivers
• more lenient follow-up and repayment terms than normal SFI rules
• and, where necessary, writing off uncollectable debts for borrowers without any repayment capacity.

Path back to formal credit

To encourage good behaviour, the scheme will report borrowers’ repayment histories to the National Credit Bureau (NCB). This is intended to:

• support future loan approvals from financial institutions
• help borrowers secure housing loans or business financing, rather than new consumption credit.

In considering such new loans, financial institutions are encouraged to focus on:

• income declared to the Revenue Department in tax filings
• and the borrower’s actual repayment ability, rather than past black marks once debts have been settled under the scheme.

For small borrowers of non-bank lenders and other creditor groups not covered in this round, the government plans to design similar debtor-centred assistance in subsequent phases, keeping the “debtor-centric” approach at the core of future household debt solutions.