The four biggest commercial banks have passed on the central bank's 25-basis-point policy rate cut almost in full, slashing their minimum retail rate (MRR) and minimum overdraft rate (MOR) from Thursday.
Kasikornbank (KBank), Krungthai Bank (KTB) and Bangkok Bank (BBL) cut their MOR and MRR by 25 basis points, while Siam Commercial Bank (SCB) lowered its MRR by 25 basis points but trimmed its MOR by a smaller amount of 12.5 basis points.
The banks' minimum lending rate (MLR) remains unchanged, however.
Both KBank's and KTB's new MRR and MOR are at the same rate of 6.87% after the rates were cut from 7.12%. The new MOR of SCB, the country's biggest lender by assets, is the lowest among industry peers at 6.745%, but the new MRR of 7.12% is higher than at other large banks.
For BBL, the new MOR and MLR will be charged at a single rate of 6.875%, compared with 7.125% before the rate reductions.
KBank, the country's second-biggest lender by assets, spearheaded the lending rate cuts yesterday, with KTB, BBL and SCB following suit.
"The bank stands ready to pass on the policy rate cut by trimming the MOR and MRR by 0.25 percentage points to help small and medium-sized enterprises (SMEs) and alleviate the burden of retail borrowers, as they are the lending rates for almost all of the loans extended to these customer groups," said KBank co-president Predee Daochai.
The Bank of Thailand's rate-setting panel last week unexpectedly cut the benchmark rate to 1.50% from 1.75% to shore up the country's tepid economic growth.
Apart from spurring the economy, the benchmark rate reduction could lessen the baht's shine in attracting offshore funds, given the lower return.
KTB president Payong Srivanich said his bank, which is majority-owned by state, understands that SMEs are scrambling amid foreign currency volatility and the US-China trade spat.
The bank's rate cuts were also in response to the central bank's policy rate cut, he said.
The lower MOR and MRR will relieve the burden of both SMEs and retail borrowers and enable them to turn things around, Mr Payong said.
BBL senior executive vice-president Suvarn Thansathit said the bank's rate cuts aim to help business operators, especially SMEs, lower their interest costs.
Meanwhile, SCB chief executive Arthid Nanthawithaya said his bank's rate cuts will lend support to a Thai economy feeling the pinch of the trade war.
Specialised financial institutions will hold a meeting soon to discuss whether they will cut interest rates.
GH Bank, the state-owned mortgage lender, is expected to jump on the rate-cutting bandwagon.
