4-10-2023 (BANGKOK) In a coordinated effort with the government, state-owned banks in Thailand have announced plans to freeze loan rates in order to support low-income earners and small and medium-sized enterprises (SMEs) grappling with the impact of elevated interest rates.
Vitai Ratanakorn, President and Chief Executive of the Government Savings Bank (GSB), revealed that the bank will suspend its loan rates to aid its 6 million loan customers. The decision comes after the recent quarter-point increase in the Bank of Thailand’s benchmark interest rate to 2.5%, marking the highest level in a decade.
Mr. Vitai emphasized that any future loan rate adjustments by GSB will hinge on the pace and strength of deposit rate increments. He expressed concerns regarding the bank’s margin if deposit rates rise rapidly.
Meanwhile, Krit Sesawet, Director and Acting President of the Government Housing (GH) Bank, stated that the bank is committed to maintaining its loan rates at the current level until the year’s end. This measure aims to alleviate the burden of monthly installment payments and provide customers with ample time to adjust to the rising interest rate, in line with the government’s debt assistance initiatives. GH Bank serves 1.79 million loan customers, with outstanding loans exceeding 1.66 trillion baht.
Narthanaree Rattapat, President of the Small and Medium Enterprise Development Bank of Thailand, highlighted the bank’s role as a state financial institution supporting small businesses. To ease the financial strain on SMEs and grant them sufficient time to manage their operations effectively, the bank has decided to freeze interest rates for all types of loans. The minimum retail rate stands at 8.05% per year, while the minimum lending rate is 7.05% per year.
