Big banks cut rates by 40 basis points
published : 9 Apr 2020 at 18:26
updated: 9 Apr 2020 at 18:42
writer: Somruedi Banchongduang
The country’s six largest commercial banks have passed on cost savings after the Bank of The country’s six largest commercial banks have passed on cost savings after the Bank of Thailand lowered their required contribution to the Financial Institutions Development Fund (FIDF), trimming prime lending rates by 40 basis points to blunt the coronavirus impact on debtors.
The central bank this week said the rate that financial institutions must contribute to the FIDF would be halved, from 0.46% of the deposit base to 0.23%, for two years to encourage financial institutions to immediately pass on cost savings by reducing their lending rates a serve as a force to alleviate the financial burden of virus-affected debtors.
Kasikornbank (KBank), Bangkok Bank (BBL), Krungthai Bank (KTB), Siam Commercial Bank (SCB), Bank of Ayudhya (BAY) and TMB-Thanachart Bank on Thursday announced lending rate cuts, effective Friday.
KBank’s minimum lending rate (MLR) is reduced to 5.60% from 6%, the minimum overdraft rate (MOR) to 6.22% from 6.62% and the minimum retail rate (MRR) to 6.10% from 6.50%, said KBank co-president Predee Daochai.
The bank’s deposits rates will remain unchanged, he said.
The rate cuts are part of KBank’s debt relief measures for customers.
SCB’s new MLR is reduced to 5.375% from 5.775%, MOR to 6.095% from 6.495% and MRR to 6.345% from 6.745%, said chief executive Arthid Nanthawitthaya.
The latest rate reduction is aiming at alleviating the financial burden of the bank’s retail and corporate customers amid the sharp economic downturn stemming from the coronavirus crisis, he said.
BBL’s MLR is reduced to 5.475%, while MOR and MRR are the same rate of 6.10%.
Suvarn Thansathit, senior executive vice-president of BBL, said the rate reduction would lower interest cost for business operators and retail customers to help them weather the crisis.
“The bank is committed to helping customers get through the crisis and taking part in driving the overall economy, which is at a stage of vulnerability dented by both internal and external factors,” he said. “BBL has taken care of and assisted business operators to have sufficient capital and liquidity for their operations and hiring employees, alleviated people’s financial burden and supported the government and the Bank of Thailand’s measures.”
BAY’s MLR is reduced to 5.83% from 6.23%, and MOR and MRR are cut to 6.30% from 6.70%.
The rate reductions are offered as part of BAY’s efforts through assistance measures, said president and chief executive Seiichiro Akita.