Bank of Thailand (BoT) governor Prasarn Trairatvorakul has expressed concern over the rising levels of personal loans and household debts.
The economy could be hurt if nothing is done to curb the trend, he said yesterday.
Speaking at a seminar on "Managing Risks and Rise to the Challenges of 2013," organised by Krung Thai Bank, Mr Prasarn said the BoT had been working with the Finance Ministry to monitor the level of private debt and prepare measures to control the problem.
Although the amount of non-bank loans was not at a critical level when compared to overall loans granted by financial institutions, the BoT has to keep watch on these types of loans as they could harm economic stability.
"Household debt is now on the rise and this is worrying because without proper management, it can lead to social and economic problems," he said.
"Economic crises in the United States and in European countries have emerged from household debts accumulating."
He admitted the BoT had only limited authority to deal with the non-bank loan problem, which is mainly handled by the Finance Ministry.
However, the BoT is authorised to control the interest rate policy for personal loans and credit cards.
Mr Prasarn said the BoT needs to keep an eye on the personal loan situation because most of the debtors are low-income earners with low capacity to pay off the debt.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter