Auto leasing business operators have shown varying levels of readiness to comply with the Bank of Thailand's regulations following a recent amendment to a royal decree on auto hire-purchase businesses.
According to Sarun Thongtammachart, chairman of the Thai Hire-Purchase Association (THPA), while THPA members have prepared to comply with the regulator's rules under the amended royal decree, their levels of preparedness differ under the new regulatory framework introduced by the central bank.
The amended royal decree, published in the Royal Gazette on June 5, stipulates that hire-purchase and leasing businesses for cars and motorcycles will come under the central bank's supervision on Dec 2, 2025.
According to Mr Sarun, THPA currently has 74 members, comprising 35 ordinary members and 39 associate members. Business operators that are subsidiaries of banks fall under the banking sector, or operate as captive leasing companies and tend to be prepared to comply with the central bank's supervision, particularly in areas related to responsible lending and market conduct, as required by the central bank.
"The well-prepared group accounts for more than 50% of the total outstanding loans. Therefore, the overall sector is expected to comply with the central bank's regulations within the specified timeframe," he said.
Nonetheless, the THPA believes the central bank will hold public hearings to help ensure the industry is fully prepared before the decree takes effect, said Mr Sarun.
The regulator earlier planned to prepare business operators using a focus group approach, categorising them into two groups -- those fully compliant, and those partially compliant. At the same time, operating costs for business operators are expected to rise as they work to meet the new regulatory requirements.
"Despite higher costs and increasing challenges amid Thailand's slowing economic growth, business operators must comply with the regulations. In the long term, this will help raise industry standards," Mr Sarun noted.
Separately, Daranee Saeju, assistant governor of the Bank of Thailand's payments supervision and financial consumer protection group, said the auto hire-purchase and leasing sector is the key funding source for Thai consumers. As of 2024, total outstanding loans in the sector amounted to 1.6 trillion baht, reflecting its broad impact on the economy and Thai consumers.
"Roughly one-third of the out‑ standing loans are provided by operators that are not currently under specific regulatory oversight," she said.
Under the new decree, the central bank will regulate both car and motorcycle hire-purchase and leasing businesses. The aim is to enhance service standards, ensure fair consumer treatment, and uphold financial and economic stability.
In the interim, business operators are advised to begin registration with the regulator and prepare to meet the upcoming regulatory requirements, the central bank said.