Bangkok, BoT issues criteria to help chronic debtors in the vulnerable group from 1 Apr. 2024, banks-non-banks. Debtors who have paid more interest than principal for more than 5 years must be notified to participate in measures to solve chronic debt. Pay off debt within 5 years, charge interest not more than 15% per year. Miss Suwanee Jesadasak, Assistant Governor Financial Institution Supervision Line The Bank of Thailand (BOT) discussed measures to solve sustainable debt problems that the BoT places importance on solving household debt problems continuously. By adjusting measures to help debtors to be consistent with the situation. Since issuing sweeping measures to help debtors during the COVID period. Then adjust to specific assistance measures after the economic situation improves. By adhering to the principle of doing it in a complete and correct manner, in the third quarter of 2023, the BoT issued guidelines for solving household debt in a sustainable way, some of which have already been effective s ince the beginning of 2024, in order to continue resolving household debt through both measures. Take care of existing vulnerable debtors and there are additional measures Especially the Responsible Lending criteria, which has been raised from asking for cooperation from financial institutions to help debtors. It requires financial institutions to grant loans responsibly and fairly. Take care of debtors who have trouble repaying their debts through debt restructuring. Help debtors who are in chronic debt to close their debts. Including protecting the rights of debtors This will help solve household debt problems more sustainably. Summary of important points as follows: Continuing to help debtors with debt restructuring From 1 Jan. 2024, retail debtors and SMEs (who have never undergone debt restructuring before) when they begin to have debt repayment problems. You will be offered a way to restructure your debt that is consistent with your ability to repay debt and leave enough money for living. The service provider must offer assistance guidelines (product program) for debtors who are beginning to have problems repaying their debts but are not yet in bad debt (NPL) at least once and for NPL debtors at least once more, without the debt being transferred or sold. Before 60 days from the date the service provider offers debt restructuring conditions to the debtor Credit card and personal loan debtors whose debt is overdue for more than 120 days can join the Debt Resolution Clinic project. The debt repayment conditions have been adjusted to pay only the principal for a maximum of 10 years, with an interest rate of only 3-5% per year, and the original accrued interest will be raised when the contract is paid in full. (Only creditors participating in the project) The BoT also has additional channels to assist debtors, including the Debt Resolution Expressway. For people asking for help with debt installments. and debt doctor for the people that provides comprehensive debt problem solving advice to retail debtors and SMEs Help chronically vulnerable debtors to be able to close their debts. From 1 April 2024, debtors of personal loans under supervision Revolving credit line type (Excluding loans with car registration as collateral Digital personal loans and credit cards) that are not NPL and have paid more total interest than the total principal over the past 3-5 years will receive assistance to pay off debt faster and reduce the interest burden that will occur. They will be notified to prompt their behavior and join in solving debt problems with creditors quickly. For debtors who have paid interest in total more than the total principal in the past 5 years and whose monthly income is less than 20,000 baht. For debtors of financial institutions and companies. In the financial business group or less than 10,000 baht for banks Can participate in measures to solve chronic debt (opt-in) by changing the type of loan to a loan that pays in installments. (installation) Protect debtors' rights more fairly Debtors are t reated so that interest and fee calculations are more fair. as well as receiving important information that is correct, complete, and comparable Including promoting financial discipline o No prepayment fees will be charged for all types of personal loans, except in the case of refinancing home loans in the first 3 years, so that debtors have the opportunity to get low interest rates o No fees will be charged debt restructuring Excluding collateral appraisal fees It is necessary to use such information in considering the conditions for debt restructuring. o Interest will not be charged on interest for loans given to retail customers. Including current account cases of overdraft loans (starting 1 July 2024) o In addition, the debtor receives important information that is correct and complete. and can be compared Including promoting financial discipline Through the provision of information by service providers to stimulate behavior throughout the debt cycle, such as having warnings: 'Borrow only as much as y ou need and can afford to repay' and the lowest and highest annual interest rates in advertising media. Notification when there will be an increase in installments or interest rates (starting 1 July 2024). Notification of advantages and disadvantages of each option for resolving debt. As well as continuous public relations through online media, such as making clips to promote financial knowledge and disseminating them through various online channels to keep the public informed. and know how to solve problems when faced with financial disasters However, in order to solve household debt efficiently and sustainably Debtors need to adjust and create more financial discipline (responsible borrowing), such as knowing the rights and important conditions of loans before borrowing. Owe only as much debt as necessary and can be repaid. Pay debts on time And when there are problems repaying debts, you must immediately contact your creditors to request debt restructuring. The BoT will supervise service providers in a ti mely and close manner. To ensure that debtors receive help that is precise, appropriate, and receive fair services. Including continuous inspection of service providers (ongoing supervision), such as pushing and following up on service providers to help debtors during COVID-19 or investigating the collection of small loan fees by some service providers that do not It meets important criteria. This year, the BoT will closely monitor compliance with Responsible Lending guidelines, such as advertising warning information along with accurate interest rates. Providing loans that the debtor can afford To supervise creditors to be appropriately responsible to customers throughout the debt cycle. and encourage debtors to have financial discipline Able to manage debt to benefit yourself The BoT will use new tools and a variety of data. to analyze Monitor and evaluate compliance with criteria Including problems/complaints of financial service users As well as raising the level of proactive inspection of service provid ers to be more efficient, such as using technology to analyze data (text analytics) on social media to identify clues and follow up on problems from using financial services that are discussed in online communities. Analyze data on service quality of financial institutions and matters that citizens complain to the BoT through online and offline channels. Source: Thai News Agency