BOT gives state banks permission to set up JVs for management of bad debts
The Bank of Thailand (BOT) has allowed state-run banks to establish a joint venture asset management company (JV AMC) to support long-term management of bad debts that have accumulated since the Covid-19 pandemic.
The move aims to minimise the economic impact of non-performing loans (NPLs) incurred from banks’ loan programmes during the outbreak that had been designed to help customers survive the crisis, Ronnadol Numnonda, BOT assistant governor of financial institutions stability, said on Wednesday.
The BOT will accept applications to set up a JV AMC until the end of this year, while each company will be granted a 15-year licence for debt management, he said.
The JV AMC will focus on helping NPL customers settle their debts in the long term by means of debt restructuring and adjustment of payment criteria to suit the current situation of debtors.
This will also help increase the opportunities for debtors to access fund sources in the future, and is in line with the government’s policy of eliminating debt problems faced by most Thais, said Ronnadol.
The central bank also hopes that the measure would enable financial institutions to become more efficient in managing NPLs and allocate their resources to support the missions and policies of the government.
