Debt restructuring periods offered to borrowers affected by the pandemic could be extended to more than 10 years, says Thai Bankers' Association (TBA) chairman Payong Srivanich.
The Bank of Thailand, in collaboration with the TBA, recently implemented additional debt assistance measures to provide sustainable aid to borrowers struggling with the pandemic's impact, said deputy central bank governor for financial institution stability Ronadol Numnonda.
The refreshed debt aid measures effective from Friday cover debt restructuring, soft loans and the asset warehousing programme.
Under these new measures, borrowers can apply for the central bank's soft loan scheme from Sept 6.
Mr Ronadol said the central bank and the TBA aim to ease the financial burden of existing borrowers and support liquidity for both existing and new borrowers to survive the crisis.
The updated debt assistance measures cover adjustment, improvement, relaxation and extension of existing measures for all borrower segments, especially retail and small and medium-sized enterprises.
The central bank extended the measures to the end of next year as they were set to expire at the end of this year.
The measures can be adjusted to match conditions, he said.
In addition, the central bank relaxed and prolonged regulations for non-performing loan classification and loan-loss reserves for financial institutions to support banks helping customers.
These regulations are extended to the end of 2023.
"With an objective to help borrowers restructure debt sustainably over the long term, the central bank talked with the TBA and allowed commercial banks to design programmes in response to real demand for each borrower segment, each loan product or business sector," Mr Ronadol said.
This easing should allow banks more options for debt restructuring, enabling a borrower to choose a programme in line with his or her income, business feasibility and debt repayment capability, he said.
Execution and implementation are the keys to success for these measures, said Mr Ronadol.
The central bank requires banks to report on progress and obstacles for the measures every two weeks, he said.
Mr Payong said the TBA expects the commercial banking industry to complete and submit its programmes by March 2022, in line with the end of some debt measures.
The TBA has not set specific maximum periods for debt restructuring programmes, as this depends on each bank's consideration in line with the impact on customers, the business sector, the loan product or the loan size per client.
For instance, the debt restructuring period for the hotel and tourism sectors could be extended to 10-15 years, while that for mortgages could reach 20-25 years, he said.
As of Aug 30, the central bank's soft loan approval tallied 98.3 billion baht offered to 32,025 business operators, while the total credit line for the asset warehousing scheme was 11.7 billion baht for 82 business operators.