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The BOT does not extend the moratorium to 1 million SMEs.
On October 19, 2020 at 3:13 p.m.
Bank of Thailand does not extend debt suspension to 1 million SMEs. Causes of the impact on bank income of 200 billion baht
Ms Rung Mallikamas, Assistant Governor Stability of the financial system and corporate strategy The Bank of Thailand (BOT) clarified that the relief measures for borrowing SMEs that received a debt suspension under the Royal Decree on the provision of financial assistance to the companies affected by the COVID outbreak: 19 That expires for 6 months on October 22, 2020 with the progress of the operation can be summarized as follows
1. SME borrowers who chose to apply for assistance under the measures amounted to 1.05 million accounts, which is equivalent to approximately 1.35 trillion baht.
2. The Bank of Thailand is closely monitoring the situation. Large amounts of debt default are not expected to occur in a short period of time (cliff effect) after the debt suspension measures expire.
1) Commercial bank debtors who have entered the measure in the amount of about 400 billion baht have been spread out for another 3-6 months, while commercial bank debtors (banks) about THB 9.5 billion . The Company closely monitors the debtor to assess their status and provide assistance. It was found that the majority of debtors expressed the intention of being able to pay their debts as usual once the measure was completed.
2) For the Commercial Bank debtor who has not yet been able to return to repay the debt normally or can pay some part, the Bank continues to provide assistance to the debtor until the income has increased enough to pay off. Debt There are several support measures, including adjusting the payment terms according to the debt service capacity of each debtor so as not to become an NPL, as well as taking other measures as appropriate, such as reducing interest rates for loans with credit cards and personal loans. Installment suspension This includes debt consolidation for retail accounts receivable and debt restructuring for multiple creditors. (multiple creditors) etc.
3) There is only 6% of the debtor’s mortgage that is still pending with the Bank or has not yet been contacted.
In addition, after the relaxation of the country’s blockade measures, the recovery of businesses in each branch is different, such as the beverage business. Consumer electronics and commerce have recovered almost to the same level as before COVID 19, while tourism-related business slowed. In particular, the hotel business recovered only 26% from the period before COVID-19.
As a result of the above reasons, the BOT generally reviewed measures to help debtors provide financial assistance to financial institutions. It is a proactive and focused assistance that is adapted to the needs of each debtor (focused). If general debt suspension measures continue, it may have a negative long-term impact due to
1) Accounts receivable will continue to earn interest on a monthly basis during the debt suspension period. What is a burden on the long-term debtor
2) Not promoting financial discipline (moral hazard) because debtors who are not affected or are less affected. You can trust it as a channel to delay debt repayment.
3) It adversely affects the stability of the financial institution system due to the long overall permanence of the debt, the liquidity in the system from debt and interest payments is expected to be approximately 200 billion baht per year.
Therefore, the group of debtors who still have sufficient income to pay the debt must pay the debt as usual after the measure is completed. Because in addition to helping reduce the debt burden, it will also provide financial institutions with more liquidity to grant loans to those still affected. The debtor has not been able to repay the debt normally. Especially those with whom financial institutions cannot be contacted. However, should you rush to contact financial institutions for appropriate assistance, the BOT has issued an announcement requiring financial institutions to maintain a standstill for debtors in negotiation for payment terms. Of the debt. Helping the debtor not to become an NPL, which increases the incentives for financial institutions to speed up debt repayment terms.
Additionally, the BOT is in the process of discussing with relevant agencies such as the Federation of Thai Industries. The Chamber of Commerce of Thailand Find out which business sector needs special assistance.
For debtors who have trouble communicating with financial institutions OR still cannot reach an agreement with the financial institution You can report your need for debt restructuring to financial institutions through the “Fast track to resolve debts” website https: / /www.1213.or.th/App/DebtCase 24 hours a day
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