The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) will spend three months monitoring the debt restructuring progress of small and medium-sized enterprises (SMEs), on a case-by-case basis, after the Bank of Thailand's debt relief measures in the second phase expire tomorrow.
Though the central bank will not prolong debt relief measures, the regulator encourages financial institutions to help borrowers who cannot pay debt normally to enter debt restructuring.
Commercial banks can offer debt restructuring to customers through several methods in line with their repayment capability. These include a grace period for interest and principal payment, interest rate cuts, debt instalment period extension and a lower debt instalment per month.
"We are satisfied with the financial assistance helping borrowers overcoming this difficult situation," Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said after yesterday's JSCCIB meeting.
Entrepreneurs who want more time to pay their debts are required to contact financial institutions, which will consider the requests on a case-by-case basis.
"We'll evaluate the outcome after three months," Mr Supant said.
The Bank of Thailand is concentrated on targeted policies helping SME business operators after the second-phase debt relief measures expire tomorrow, rather than the existing blanket policies.
The value of debtors receiving debt relief measures in the formal banking system totals 6.89 trillion baht, with 1.35 trillion baht attributed to SME loans across 1.05 million accounts.
Payong Srivanich, chairman of the Thai Bankers' Association (TBA), said 80,000 SME debtors accounting for 6% of total outstanding debt have "lost contact" with financial institutions, which are trying to draw them back into the system.
About 10% want to continue debt relief measures. Banks will consider helping them with debt restructuring on a case-by-case basis.
For debtors who are given more time to pay, the additional period must not exceed six months from the end of this year, Mr Payong said.
"Many businesses facing financial woes are in the tourism sector, especially the hotel business," Mr Supant said.
According to Mr Payong, two other groups of debtors are in a better situation. Up to 60% can pay back, while 20% can resume business but not fully recover and want financial institutions to adjust the debt structure based on repayment ability.
The JSCCIB yesterday also raised concern over the ongoing political conflict after foreign business people said they were increasingly worried about safety issues and a possible unpleasant impact on business.