The Bank of Thailand says it is introducing more measures to ensure the success of a debt restructuring to reduce some 16.2 trillion baht in outstanding household debt.
The central bank is preparing to start making unscheduled visits to make sure that lenders are offering reasonable and realistic debt solutions to their customers, according to a statement released on Wednesday.
Banks found failing to comply must immediately correct their course of action or be liable for penalties, it said.
Starting from April 1, the central bank will also ask all commercial banks and almost 100 non-bank lenders to offer a new restructuring programme for debts classified as persistent — on which payment of interest and charges has exceeded repayment of principal for 18 months or more.
Borrowers of such debt will be given a chance to settle their obligations within five years, at an interest rate not exceeding 15%, compared to a 25% standard charge, the statement said.
Household debt in Thailand is among the highest in Asia, peaking at 96% of gross domestic product in 2021 before easing to about 91%, putting pressure on the government of Prime Minister Srettha Thavisin to address the longstanding issue with several measures.
Mr Srettha has also pressured the central bank to lower interest rates to ease the debt burden, a strategy that the BoT has said could even worsen the problem, which is already a major drag on the economy.