The Bank of Thailand has asked banks to clarify the interest burden on its proliferated zero-interest mortgage campaigns to customers.
Assistant governor Ruchukorn Siriyodhin said the central bank wants to ensure customers are well informed about the average interest burden on such loan campaigns.
For these loans, banks and state banks offer no interest on new mortgages or refinancing loans for the first 3-6 months, then gradually increase interest on a ladder scale in subsequent years.
"Housing loans are long term, so customers should know what the total interest burden will be," she said.
"The central bank is not prohibiting such loans, but we want borrowers to understand the details for comparison with other products."
The central bank began discussing the issue with banks over the past month. The move mirrored a previous decision ordering banks to clarify interest gains on deposit campaigns attached to prizes or lucky draws.
Ms Ruchukorn said the Bank of Thailand is monitoring non-performing loans (NPLs) and household debts.
It found banks' lending standards had barely eased and that NPLs are not high.
Loans outstanding increased at a steady rate of 15% year-on-year from January-February.
The banking system's loans did not significantly increase, given the high economic growth rate, said Ms Ruchukorn.
About the author
- Writer: Parista Yuthamanop