GSB mulls extending debt moratorium measure
published : 21 Jul 2020 at 04:00
newspaper section: Business
writer: Wichit Chantanusornsiri
The Government Savings Bank (GSB) is considering extending the debt moratorium measure due to end in September as most customers are still reeling from the Covid-19 impact.
The bank's board meeting held on Monday discussed extending the debt moratorium that has been in place since April, said GSB president and chief executive Vitai Ratanakorn.
The extension period will depend on the board's consideration, said Mr Vitai.
The move is in line with the policy of the Finance Ministry and the Bank of Thailand, which want financial institutions to help clients that have been affected by the outbreak. The policy also aims to prevent higher loan delinquency from occurring.
The pandemic has resulted in income deterioration and lower debt-servicing ability.
Although GSB has implemented an automatic debt moratorium, there are still some customers who can service debt, but they are a minority of total customers, he said.
Despite a move to extend the debt moratorium period and beef up loan-loss reserves, these will not affect the bank's capital adequacy ratio, which still remains high, said Mr Vitai.
GSB's non-performing loan ratio is registered at 3% of total outstanding loans.
The bank's profit will be affected by lacklustre economic conditions and implementation of customer support measures, he said.
Separately, the Bank for Agriculture and Agricultural Cooperatives (BAAC) has requested additional emergency loans worth 10 billion baht to aid affected farmers.
The request will be proposed to the BAAC's board for approval this Thursday.
BAAC senior vice-president Surachai Rusmee said the emergency loans are classified as soft loans from the GSB and they charge 0.01% interest.
As the BAAC offers these loans to farmers, the bank charges a 2% interest with a credit line of no more than 10,000 baht per person.
Previously the BAAC offered emergency loans granted by the GSB to 2 million borrowers worth a combined 7 billion baht.
For the one-year debt moratorium project and extension of debt repayment for farmers, the combined sum is worth 2.2 trillion baht, with 1.2 trillion attributed to the debt moratorium project.
The project is due to end in April 2021, but could be extended depending on circumstances, said Mr Surachai.
- debt moratorium
- emergency loans