The Bank of Thailand (BoT) plans to alleviate household debt by prioritizing financial assistance to vulnerable borrowers who are classified as lower-income earners.
According to BoT deputy governor Ronadol Numnonda, the central bank is collaborating with the government and private sectors to provide financial assistance to these groups of borrowers since they are a key factor in solving the country’s household debt issue. He emphasized that their goal will be to increase these people’s income in order to strengthen their ability to pay debts.
The BoT said it intends to establish guidelines to address the issue, while regulatory agencies, financial institutions, and other stakeholders will work together to promote financial information to the general public.
The deputy governor stated that the central bank will not establish a specific debt-to-service ratio (DSR) as regulation and will only outline some definitions as a guideline for financial institutions. This guideline will urge institutions to take into account not only their clients’ debt payment ability but also their clients’ residual income to live daily lives after paying their debts.
Another method mentioned by the deputy governor is establishing data sharing among related parties, as having sufficient information would allow institutions and regulators to implement additional measures to help borrowers.
Furthermore, the deputy governor stated that some financial institutions have expressed a desire to form a joint venture asset management company (JV-AMC), which provides banks with greater flexibility in managing bad debts, ultimately benefiting both individual and commercial borrowers. (NNT)
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