The number of farmers and small and medium-sized enterprises (SMEs) eligible for the initial phase of the debt moratorium will not exceed 7 million, says Deputy Finance Minister Julapun Amornvivat.
He said for the first round the number of small-scale farmers and SMEs who will be eligible for the moratorium on both principal and interest payments will be around 4 million and 3 million, respectively.
Mr Julapun declined to offer details on the extent and limit of the debt suspension.
These details will be determined in part by the fiscal burden shouldered by the government in terms of interest payments to state financial institutions, according to the ministry.
He said in principle, the debt relief will be offered to small-scale farmers and SMEs without the need to prove any hardship.
More details of the scheme are expected over the next two weeks, which will be presented to a cabinet meeting around the beginning of October, said Mr Julapun.
Once the first phase is implemented, the government plans to explore the debt problems of other categories of borrowers, including agricultural cooperatives, teachers, police officers and informal debt borrowers.
The prime minister appointed the Finance Ministry to accelerate debt suspension for the initial category and help mitigate the debt burden of the entire population.
Chatchai Sirilai, president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), said the debt moratorium scheme for farmers will not affect the bank's liquidity.
He said the bank has excess liquidity of 10.6% of total liquidity, with the Bank of Thailand minimum set at 6%.
In theory, excess liquidity should not be less than 8.5-10% of total liquidity, said Mr Chatchai.
Every 1% of liquidity is equivalent to 18 billion baht, he said.
The bank proposed to the government various options for the outstanding loan limit for the programme.
The BAAC has 4.2 million customers, of which around 30% have debts of less than 100,000 baht.
Mr Chatchai insisted the debt relief measures will not cause a moral hazard as the scheme will be operated in parallel with an incentive programme to educate farmers.
Farmers must submit a statement of intent on their application for the programme.
Those who prefer to repay their debt while still in the programme can do so.
The government also provides opportunities for farmers participating in the programme to obtain more loans from the BAAC for investment and income generation, in order to prevent borrowing from loan sharks charging exorbitant interest rates.
The BAAC's non-performing loans (NPLs) are 8.17% of the outstanding loan balance.
The bank's bad debt management plan calls for NPL levels to fall to 5.5% from the end of this accounting year until March next year.