Throw debtors a line to tackle NPLs, ministry instructs five govt banks
The Finance Ministry ordered five government banks to assist debtors with non-performing loans (NPLs) so they can repay their debts on time.
The five banks are the Bank for Agriculture and Agricultural Cooperatives (BAAC), Government Savings Bank (GSB), Government Housing Bank, Small and Medium Enterprise Development Bank and the Islamic Bank of Thailand.
Finance Minister Arkhom Termpittayapaisith said the GSB and BAAC have the highest NPLs among the five as they have helped a number of debtors.
He said the government is ready to pay compensation to government banks if their NPLs have risen due to government policies.
“We will not let government banks spend all their money to help debtors as they must reserve cash in line with the Bank of Thailand rules and maintain liquidity similar to commercial banks,” he said.
Arkhom said a variety of methods, such as granting debt moratorium and launching projects to generate income among debtors, will enable them to repay their debts as usual.
He provided an example, saying that the BAAC has granted loans to 10 million debtors with NPLs to generate income from additional occupations such as growing vegetables.
“This move may make NPLs rise, but government banks must know their customers, not just the amount of their debt but also their problems,” the minister said.
Farmers in some communities have set up financial institutions to enable members to repay their debts at low-interest rates, he added.
