Prime Minister introduces fresh tactics to lower debt

Government Initiatives to Address Debt Challenges: Collaborating with Credit Card Companies, Debt Restructuring, and Informal Debt Resolution

The Ministry of Finance and the Bank of Thailand are set to collaborate with major credit card companies to rejoin a debt restructuring program, aiming to benefit both customers and companies in the long run. This initiative comes as part of a broader effort to address various debt issues affecting different sectors of the economy.

For real estate debt, the Government Housing Bank (GH Bank) has already offered debt restructuring for 80,000 households struggling with repayment. This includes extending repayment periods up to 80-85 years to reduce monthly payments, with a significant number of participants already signed up for the scheme. The Bank of Thailand is also exploring the possibility of extending housing loan repayment periods with commercial banks, considering houses as appreciating assets.

In terms of vehicle debt, concerns have been raised about increasing defaults and shrinking new car loans, particularly for pickup trucks and motorcycles essential to livelihoods. Relevant parties will be summoned to report their solutions at an upcoming meeting to address these challenges.

The Ministry of Finance is also focusing on resolving the debt issues of the Student Loan Fund (SLF), with plans to recalculate debts according to new laws. Overpayments totaling 2.1 billion baht will be promptly refunded to 170,000 individuals, while another 2 million debtors are having their debts recalculated, amounting to 54 billion baht.

Informal debts are also being addressed, with the Interior and Finance ministries working to integrate them into the formal system. The government is exploring innovative solutions to tackle systemic debts, with clearer results expected soon.

Prime Minister Chai Wachirong has directed the Bank of Thailand to work with commercial banks to establish concrete credit card debt solutions within two weeks. Additionally, efforts are underway to bring informal debts into the formal system, similar to the PICO Finance approach, by licensing informal creditors who wish to transition.

Overall, these strategic initiatives aim to reduce NPL ratios for banks, prevent bad debtor records, and ultimately benefit the overall economy. Stay tuned for more updates on the progress of these debt reduction strategies.

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