Thai government asks central bank to review credit card and personal loan rates
BANGKOK (Reuters) – The Thai government has asked the central bank to review interest rates on credit cards and personal loans in an attempt to tackle high household debt, its prime minister said on Tuesday, bringing down bank stocks.
Prayuth Chan-ocha said that a series of measures prepared to solve debt problems include reducing the burden of people’s interest rates, adjusting debt repayment and promoting competition for lower rates. lower interest.
The central bank has been asked to review the interest rate cap and oversee credit cards, personal loans and auto title lending, he said.
“If our people still have a lot of debt and at a young age it will affect their entire lives,” Prayuth said in a briefing after a cabinet meeting.
Thai household debt stood at 14 trillion baht ($ 449.87 billion) at the end of December, or 89.3 percent of gross domestic product (GDP), among the highest in Asia.
The move sent bank stocks down 1.2% in the early afternoon, Kasikornbank down 2.3% and Siam Commercial Bank 1.9%. Analysts said lowering rates will hurt bank profits.
Last year, the central bank lowered the cap on credit card interest rates to 16% per year from 18% and that for personal loans to 24% to 25% from 28%, to help debtors make money. in the face of the impact of coronavirus epidemics.
(US $ 1 = 31.12 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon, Satawasin Staporncharnchai; editing by Martin Petty)