BANGKOK, July 21 (Reuters) – Thailand’s central bank is discussing interest rate cuts on some consumer loans, fearing lenders will reject high-risk borrowers and push them into loan sharks, a deputy governor.
Last month, Prime Minister Prayuth Chan-ocha called on the Bank of Thailand (BOT) to review the interest rate cap on credit cards and personal loans to help debtors and tackle high debt. households, a decision that has increased pressure on banks.
“We are still thinking about whether or not we are going to cut (the rates). We have to look at the pros and cons,” Deputy Governor Thanyanit Niyomkarn said at a briefing.
If interest rates are lowered, high-risk debtors who already pay the highest interest rates will be kicked out of the financial system to loan sharks who lend at extremely high rates, she said.
Last year, the BOT lowered the credit card rate cap to 16% per year from 18% and the rate for personal loans to 24% -25% from 28%, to help debtors cope with an epidemic of debt. COVID-19.
This quarter, the BOT plans to announce rules on bank charges that will be fair and better reflect the actual costs incurred by lenders, Thanyanit added.
Reporting by Satawasin Staporncharnchai Writing by Orathai Sriring Editing by James Pearson
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