Asset warehouse scheme predicted in 2 months

Asset warehouse scheme predicted in 2 months

The asset warehousing programme is expected to be implemented in the next two months amid calls urging the Bank of Thailand to expand the assistance scope to cover low-cost airlines, says the Thai Bankers' Association (TBA).

The TBA completed the asset warehousing programme framework after discussions with commercial bank members. Under the programme, a commercial bank would manage its own debt collateral assets, said TBA chairman Payong Srivanich.

The Bangkok Post reported earlier the asset warehousing programme in principle allows business operators to suspend debt repayment and transfer property assets, as loan collateral, to their creditors temporarily within a specific time frame.

Business operators would then be allowed to either lease these frozen assets from the creditors to continue their business operations or let the creditors manage the frozen assets.

A buy-back agreement within a specific time frame would also be embedded as a condition in the asset warehousing programme.

Mr Payong said the time frame for the asset warehousing concept could possibly be in a range of 3-5 years.

The TBA submitted its request to expand the scope of the asset warehousing programme to cover low-cost airlines and other businesses involved with the tourism supply chain, he said.

The government, financial authorities and the private sector have been deliberating on a scheme to aid small and medium-sized enterprises (SMEs), hotels and the property sector.

For frozen assets leased by businesses to continue operations, the fees should be lower than existing interest rates to help operators survive the crisis and support the country's economic recovery, said Mr Payong.

The government is mulling either waiving or subsidising transaction fees and relevant taxes under the asset warehousing programme, he said.

"The assistance programme is designed for businesses reeling from the Covid-19 crisis that have debt collateral assets. It will not cover all businesses, otherwise this would lead to a moral hazard," said Mr Payong.

The government has also considered amending the Bank of Thailand's 500-billion-baht soft loan decree and using 100 billion to fund the asset warehousing programme.

Finance Minister Arkhom Termpittayapaisith said the ministry and the central bank have deliberated amending the soft loan decree as SMEs cannot access loans, with around 100 billion baht disbursed from the total of 500 billion.

One alteration is to hike up the 2% interest ceiling for banks providing soft loans to SMEs, said Mr Arkhom.

Each SME would be allowed to seek 20 million baht in soft loans and 500 million maximum, he said.

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