Finance Ministry extends relief for state banks to ease loan fears
Four state banks will get another year of relief on contributions to the Specialised Financial Institutions Development Fund (SFIF), a Finance Ministry source said on Monday.
Approval to extend the reduction in contributions from 0.25% to 0.125% of total deposits to the end of 2023 was granted at a meeting of fund committees chaired by Finance permanent secretary Krisada Chinavicharana on Monday.
The extension covers the Government Savings Bank, Bank for Agriculture and Agricultural Cooperatives, Government Housing Bank, and Islamic Bank of Thailand.
The SFIF is used to reduce the banks’ non-performing loans (NPLs) and relieve financial burdens on bank customers who are unable to make repayments. To be granted SFIF aid, customers must meet Fiscal Policy Office criteria aimed at identifying those most in need.
The extension will be sent to Cabinet for final approval soon.
Chatchai Sirilai, president of the Government Housing Bank and the Government Financial Institutions Association, said the reduction of SFIF contributions coupled with other Finance Ministry measures would enable banks to suppress interest rates to help customers pay back their debts.
Customers of state-run banks could be rest assured they would not suffer sharp hikes of reference interest rates such as MLR, MOR and MRR by 0.4% at a time, as with commercial banks, he said.
“State-run banks will only raise interest rates in line with market conditions and will try to minimise the impact on customers.”
