Credit card debt cuts will only apply to those on credit bureau list
National Economic and Social Development Council stresses that the proposed measures do not refer to regular credit card accounts
The proposed credit card debt cuts will apply only to those listed by the credit bureau, according to the National Economic and Social Development Council (NESDC).
The Council’s secretary-general, Danucha Pichayanan, noted that clarity is awaited from the Ministry of Finance and the Bank of Thailand (BOT) on the approach that would allow creditors and debtors to negotiate debt reduction agreements that would prevent the debts from becoming irrecoverable.
The government’s initial discussion with the BOT focused on debtors with non-performing credit card loans (NPLs) whose names are listed by the credit bureau. The proposed assistance aims to allow these debtors to repay part of their debts, after which their names will be removed from the NPL list, enabling them to resume normal financial transactions.
While the number of debtors may be large at approximately 1 million accounts, the total debt is not substantial, amounting to about 500 million baht. If this issue can be resolved, it will help assist those debtors with non-performing debts.
Asked if this approach could create a moral hazard, Danucha explained that these debtors belong to a specific group already listed by financial institutions, and this is not a general debt issue. These debts are not part of regular credit card accounts.
The proposal will be presented for Cabinet approval on December 11. Implementation may require some budget allocation, and some debtors from state-owned financial institutions might need assistance as well. Details will need to be clarified by the Ministry of Finance, Danucha added.
