BANGKOK (Reuters) – Thailand’s cabinet on Wednesday approved debt support measures, including interest suspensions and reduced principal payments, to help tackle household debt, Prime Minister Paetongtarn Shinawatra said.
The measures will help retail borrowers and smaller businesses, she told a press conference.
Finance Minister Pichai Chunhavajira told reporters the cabinet also agreed to allow banks to pay a reduced annual contribution of 0.23% of their deposits to the Financial Institutions Development Fund (FIDF) for three years.
The reduced FIDF contributions would help banks support debtors, officials have said.
Banks currently must pay an annual regular contribution rate of 0.46% of their deposits to the FIDF, the central bank’s rescue arm that provides financial assistance to troubled institutions.
The Bank of Thailand will hold a briefing on the debt relief measures later on Wednesday.
The measures will help borrowers with debts that are up to a year overdue, covering housing loans of up to 5 million baht ($148,060), car loans not exceeding 800,000 baht and smaller firms’ loans of up to 5 million, the government said in a statement.
The government has been trying to ease the debt burden of households, which it sees as a constraint on consumption and economic growth.
Thailand had a 89.6% household debt-to-GDP ratio at the end of June, with household debt totalling 16.3 trillion baht ($482 billion), among the highest levels in Asia.
($1 = 33.82 baht)
($1 = 33.7700 baht)
(Reporting by Orathai Sriring, Kitiphong Thaichareon and Thanadech Staporncharnchai, Panarat Thepgumpanat; Editing by Martin Petty)
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