Interest rate cut for loan defaulters

Interest rate cut for loan defaulters

Parliament has approved an emergency decree to amend the Civil and Commercial Code to reduce the interest rate charged for loan defaults which has been used for almost a century.

Finance Minister Arkhom Termpittayapaisith said the law would be amended during the prolonged Covid-19 pandemic to help debtors who are having to pay interest as high as 7.5% per annum.

The average current savings interest rate in the country is just 0.5% per annum.

Under the current law, the interest rate for loan defaults, where no rate is specified in a contract, is 7.5%.

The amendment bill cuts the rate in contracts in the event no rate is specified to 3%, and the rate for defaults to 5%. It is not known how many stand to benefit.

Under the law, some creditors took advantage of their debtors by charging excess interest, putting them in even more in debt, said the minister.

Amending the law to cut the statutory interest rate was of utmost urgency to help debtors, particularly SMEs seriously affected by Covid-19, he said.

Mr Arkhom said in March that the Civil and Criminal Code had been in place for 95 years and the 7.5% statutory rate should be changed in response to the prevailing economic conditions.

Do you like the content of this article?

New Czech president expected to foster EU, Ukraine ties

PRAGUE: Newly-elected Czech president Petr Pavel, a former NATO general, will promote close ties with the European Union and offer firm support for Ukraine in the face of the Russian invasion, analysts said.

29 Jan 2023

Indonesian leprosy survivor crafts new limbs for shunned villagers

When Ali Saga visited a clinic in Jakarta four decades ago, he watched as patients and health workers scrambled to get away from him.

29 Jan 2023

At least 51 killed in twin Pakistan transport tragedies

At least 51 people were killed in two separate transport accidents in western Pakistan on Sunday, when a bus plunged off a bridge and a boat carrying a class of children capsized.

29 Jan 2023