Financial institutions urged to soften stance

Financial institutions urged to soften stance

The Finance Ministry has ordered state-owned financial institutions to consider suspending principal and interest payments for all clients suffering from the effects of the pandemic, rather than using a case-by-case basis, says Krisada Chinavicharana, the ministry's permanent secretary.

The ministry believes financial assistance should be provided on a blanket basis to match the wide scale of the impact caused by the pandemic, he said.

The move is in line with the cabinet's request to the ministry and the Bank of Thailand to jointly discuss with related parties ways to ease the burden of banks' clients from the impact of the pandemic.

Last month the Finance Ministry 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, which was compounded by the outbreak.

Mr Krisada said the ministry will ask for collaboration from non-bank institutions to also provide relief measures to their clients. The ministry has no control over them as they are private entities.

In a related matter, Fiscal Policy Office director-general Kulaya Tantitemit said the ministry decided to extend the period employers and employees can delay or suspend contributions to the state provident fund until December this year.

This original measure started from May 2020 and expired in June of 2021.

The Finance Ministry had the extension published in the Royal Gazette on July 12 and the extension took effect on July 13.

The decision aims to ease the impact of the pandemic on both employers and employees, said Ms Kulaya.

From May 2020 until March 2021, some 374,000 fund employee members stopped making contributions to the fund.

The delay or suspension of contributions is on a voluntary basis by employees and employers.

She said this is not the longest period for such a delay of provident fund contributions. The ministry launched a similar measure during the Tom Yum Kung economic crisis in 1997 that lasted two years, four months.

Employees and employers are typically required to contribute in a range of 2-15% from salaries to the fund.

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