Banks’ lending to grow 10% next year

Lending by commercial banks is expected to expand by at least 10 per cent next year in line with the country’s economic recovery, Finance Minister Korn Chatikavanij said on Friday.

“Commercial bank lending has substantially contracted this year due to the impact of the global financial crisis. This has forced state-owned financial institutions to step in to provide the needed loans for manufacturers and other businesses," Mr Korn said.

The private sector would be able to resume its key role in mobilising the economy in 2010 so that state-owned financial institutions could return to their main task of helping solve social problems such as illegal money lending, the minister said.

Mr Korn believed the central bank’s Monetary Policy Committee, which will meet early next month, would keep its policy rate unchanged as there was no pressure from inflation and existing liquidity in the system was sufficient for funding requirements.