State-owned Government Savings Bank's (GSB) credit card refinancing scheme, enabling participants to pay a minimum amount due of 2.5% per instalment compared with 10% now, is scheduled to begin next month.
Credit card debtors using the scheme are subject to a 10.5% interest rate per year for the general public and 8.5% for civil servants, well below the 20% cap set by the Bank of Thailand. The lower minimum amount due and interest rate is expected to help debtors pay off their debt faster and alleviate their financial burden.
Those who are eligible to participate in the GSB's refinancing scheme can transfer credit card debt of up to 100,000 baht each and are required to pay off the debt within four years, said Chatchai Payuhanaveechai, president and chief executive.
He said some multiple credit cardholders owe 100,000 baht and they must service at least 10,000 baht a month, a heavy financial burden for those with monthly income of 20,000 baht or lower.
Deputy Prime Minister Somkid Jatusripitak threw support behind GSB's scheme, saying credit card debt is a big burden for the middle class and the bank should alleviate their financial burden.
For state officials in debt, he referred to Prime Minister Prayut Chan-o-cha's order to delegate GSB and Krungthai Bank to sort out ways to restructure their debt to alleviate their burden, particularly those suffering from high indebtedness and interest rates, Mr Somkid said after meeting with GSB executives yesterday.
GSB is set to launch debt relief measures for teachers within one month, Mr Chatchai said, adding that debt repayment rescheduling and an interest rate cut would be among such measures.
The bank plans to take the reduced interest rate amount to lower debt principal, enabling teachers to get out of debt faster, he said.
Only those with a good payment track record will be allowed to participate in the scheme.
Civil servants have combined debt of 1 trillion baht, of which 629 billion is owed to GSB by 1.18 million state officials.
Civil service teachers owe more than any others working in the public sector at 390 billion baht out of the 629 billion, said Mr Chatchai.
High debt repayment per instalment is the main problem for teachers, while their soured debts account for around 2%.