State banks are increasing their interest rates following the Bank of Thailand's policy rate hike.
Both the Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives (BAAC) have raised interest rates for both loans and deposits, with deposit rates higher than loan rates.
Vitai Ratanakorn, president and chief executive of GSB, said after the central bank raised the policy rate by a quarter percentage point from 1.75% to 2% on May 31, GSB raised fixed deposit rates to a maximum of 0.35% per year.
The bank also launched high-yield deposit campaigns, such as special deposit products and savings lotteries that increase the amount of both interest and prizes.
On a gradual basis, GSB increased all types of loan rates by 0.25% per year, effective June 8, to ensure equal access to financial services, particularly for retail customers and vulnerable groups.
He said the bank's minimum retail rate (MRR) is lower than the average rate offered by large commercial banks.
Chatchai Sirilai, managing director of BAAC, said the bank raised deposit interest rates by 0.05-0.50% per year to promote savings and increase returns, making them more competitive with the yields of commercial banks and specialised financial institutions.
The bank also increased all types of loan rates by 0.10-0.25% per year. The MRR increased from 6.88% to 6.98% per year, the minimum loan rate hiked from 5.38% to 5.63% per year; and the minimum overdraft rate rose from 6.75% to 6.88% per year.
All changes were effective as of June 6.
The BAAC has offered relief measures to assist farmers and individuals, aiming to mitigate the impact of the pandemic amid the continuing economic recovery, which includes debt restructuring, career building, a debt moratorium for both principal and interest, and debt management consultancy.