State banks urged to study 0% interest rates

State banks urged to study 0% interest rates

Finance expects responses this week

The Government Savings Bank and several financial institutions offer low-interest loans to restaurants in Pathum Thani province to help during the pandemic. (Photo by Pongpat Wongyala)
The Government Savings Bank and several financial institutions offer low-interest loans to restaurants in Pathum Thani province to help during the pandemic. (Photo by Pongpat Wongyala)

The Finance Ministry has asked state-run banks to consider lowering interest rates to 0% until the end of this year as part of the government's efforts to curb household debt, compounded by the outbreak.

Permanent finance secretary Krisada Chinavicharana said Finance Minister Arkhom Termpittayapaisith held a meeting on Monday with state financial institutions to discuss ways to help people suffering from the economic impact of the outbreak.

One option discussed was state banks lowering their interest rates to 0-0.01% until the end of this year, with a focus on assisting the restaurant and tourism industry.

Mr Krisada said state banks have to consider how much they can help affected businesses and are expected to send their conclusions to the ministry later this week.

He said one state bank already informed the ministry of its plan to offer an interest rate of 0.01% until the end of this year for individual and corporate clients affected by the outbreak.

The meeting was held in response to the government's vow to tackle household debt incurred by credit cards and personal loans, as well as an effort to provide measures to strengthen the competitiveness of local financial institutions over the long term.

Last week Prime Minister Prayut Chan-o-cha said within six months, related agencies are required to reduce the interest rate for personal loans, as well as for microfinance and nanofinance lending to small-scale debtors, teachers and cooperatives, and car and motorcycle leasing businesses.

Mr Krisada said state banks have offered relief measures to clients since the first wave of the outbreak. He believes state banks' offers of additional assistance will not affect their financial status.

In a related matter, Government Savings Bank (GSB) launched a measure to suspend the payment of principal and interest for six months for small and medium-sized enterprises (SMEs), hotels, resorts, guesthouses and serviced apartments, said bank president Vitai Ratanakorn.

The move is in line with the Finance Ministry tasking GSB to find ways to help the tourism sector, which has been struggling since the first wave.

The suspension is valid from July to December this year and covers SMEs, hotels, resorts, guesthouses and serviced apartments that owe up to 250 million baht and have an overdue debt payment period not exceeding 90 days.

Do you like the content of this article?
COMMENT (16)

Myanmar junta blames internet blackouts on anti-coup fighters

Myanmar's junta has denied suspending the internet in conflict-wracked regions, blaming a recent spate of data blackouts on anti-coup protesters who had destroyed military-owned communications towers.

19:42

Patients evacuated after floods ravage Chaiyaphum hospital

Rescuers worked feverishly to evacuate forty patients as Bamnet Narong Hospital in Chaiyaphum was flooded on Sunday morning, seriously damaging the facility.

18:09

China's Xi warns of 'grim' Taiwan situation in letter to opposition

TAIPEI: The situation in the Taiwan Strait is "complex and grim", Chinese President Xi Jinping wrote in a congratulatory letter on Sunday to the newly elected leader of Taiwan's main opposition party, who has pledged to renew talks with Beijing.

17:07