Pichai has scheme for bad loans

Finance Minister Pichai Chunhavajira has proposed measures to address retail non-performing loans at commercial banks, which now total 1 trillion baht, including a three-year suspension of interest payments.
He said there are two primary objectives with the existing debts: 1) to restructure the loans to make them repayable; and 2) to allow borrowers who can repay their debts to access additional credit.
To achieve these goals, the programme targets debtors who have recently started to experience payment difficulties, specifically those who have been overdue on payments for 30 to 90 days.
The programme may also consider borrowers who have been in arrears for 90 days to one year, as this group continues to face problems despite a somewhat longer delinquency period, said Mr Pichai.
He said this group of borrowers is still capable of tackling their debts.
However, Mr Pichai said debts overdue for more than one year will be excluded from the scheme.
The initial group of debtors targeted by the measures represents around 1 trillion baht in outstanding loans.
The proposed solutions include a suspension of interest payments for three years, with the burden of unpaid interest supported by both the government and the banking sector.
For the interest suspension, he said borrowers participating in the programme will only need to repay the principal.
The repayment period for the principal will be extended, with borrowers required to pay only half of the previous principal payment amount initially, said Mr Pichai.
He said these debtors are still listed with the National Credit Bureau, so their ability to apply for new loans would depend on their credit status as assessed by banks.
Mr Pichai said based on discussions with commercial banks, they are in agreement with this approach.
In addition, he said he plans to discuss with the Bank of Thailand the possibility of easing the loan-to-value ratio requirements to make loans more accessible to the public.