GSB rolls out measure to stop debts turning bad
State-owned Government Savings Bank (GSB) has rolled out a measure to curb existing debts from turning bad, offering a suspension of the repayment of principal and a partial amount of interest.
According to GSB president and chief executive Vitai Ratanakorn, the aid measure, which aims to help relieve the burden of the bank's debtors hit hard by the pandemic, will be applicable to debtors who start failing to repay the debt as of Feb 28.
Effective immediately, the measure will help sustain the debtor's status and prevent them from becoming non-performing loans which will damage their credit records, making them unable to secure loans in the future from financial institutions.
An NPL is a loan in which the borrower is in default and has not paid the monthly principal and interest repayments for 90 days or more. NPLs occur when borrowers run out of money to make repayments or get into situations that make it difficult for them to continue making repayments.
According to Mr Vitai, the bank has examined and screened out existing debtor accounts, concentrating mainly on debtors in housing loans, Saitong multipurpose loans, benefit loans and loan programmes offered to teachers and educational personnel and people's banks, finding there is a certain number of debtors having the first overdue date on Feb 28, but not yet more than 90 days past the due date.
"The bank sees an urgent need to come up with a relief plan for this group," said Mr Vitai. "Under the relief plan, the bank will offer suspension only of the principal repayment with intact interest repayment for the majority of debtors."
Nonetheless, he said the bank still allows a certain number of debtors to suspend principal repayment and choose to repay just a partial amount of interest at the rate as imposed.
The bank will later work on repayment plans for each debtor in accordance with their repayment capability.
According to Mr Vitai, debtors who choose to repay a partial interest amount with their principal repayment suspended could choose to repay interest at a rate of 25%, 50% and 75% of their monthly interest repayment burden.
He said this group of debtors will later receive information on their debt repayment plan the bank has prepared in MyMo, the GSB's mobile banking application, for each eligible debtor.
Once they enter the application, they have to choose the repayment menu for 2021, the system will then show them the repayment according to their original borrowing contract and details of the repayment plan according to the relief measure.
Debtors are allowed to process the new repayment plan without travelling personally to contact the bank.