Prayut calls on Bank of Thailand to lower credit card and loan rates

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A woman walks out of a branch of Siam Commercial Bank in Bangkok, April 18, 2016 (Reuters file photo)

The government has asked the central bank to review interest rates on credit cards and personal loans in an attempt to tackle high household debt, the prime minister said on Tuesday, pushing bank stocks down.

General Prayut Chan-o-cha said 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 interest rates.

The Bank of Thailand (BoT) 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,” General Prayut said in a briefing after a cabinet meeting.

The country’s household debt stood at 14 trillion baht at the end of December, or 89.3% 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 down 1.9%. Analysts said lowering rates will hurt bank profits.

Last year, the BoT cut the interest rate cap on credit cards to 16% per annum from 18% and that on personal loans to 24% to 25% from 28%, to help debtors cope. to the impact of coronavirus outbreaks.

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