The Thai Bankers’ Association (TBA) says it will support the government’s new debt resolution programme, in which asset management companies (AMCs) will play the lead role.
Payong Srivanich, the association chairman, said members would cooperate with the relevant agencies to address the country’s household debt problems, working to reintegrate small debtors into the formal financial system.
Under the supervision of the Ministry of Finance and the Bank of Thailand, the initiative targets small-scale borrowers with total debt of less than 100,000 baht each in non-performing loans (NPLs).
‘We expect the new debt resolution measure to strengthen the country’s debt management capability,’ said Mr Payong.
At its meeting on Monday, the economic cabinet approved the latest debt resolution plan aimed at helping retail borrowers.
Under the plan, the debts are to be transferred to state-owned Ari AMC and Sukhumvit Asset Management (SAM).
Roughly 3.5 million individuals have total debt of less than 100,000 baht that is classified as non-performing in 4.76 million accounts, with total outstanding debt of 122 billion baht.
In the first phase, the transfer covers 2.56 million NPL accounts from commercial banks, representing about 1.25 million borrowers and total debt of 43.6 billion baht. These debts are to be transferred to Sukhumvit Asset Management.
Another portion consists of 790,000 accounts from specialised financial institutions, representing about 700,000 borrowers and total debt of 18.8 billion baht, which will be transferred to Ari AMC.
The remaining portion, consisting of retail borrowers from non-bank institutions, is expected to be handled in the next phase.
Authorities are also encouraging financial institutions to establish joint-venture AMCs to help reduce bad debts in the banking sector. The Bank of Thailand is planning to extend the application period and is revising the conditions for JV-AMCs.
Mr Payong, who is also president of Krungthai Bank, said the state-owned bank initially plans to utilise SAM to manage its bad debts under the new government scheme. It is considering establishing a JV-AMC, but is awaiting the amended licensing conditions.
‘KTB has been studying NPL management options under this framework and is in discussions with potential partners to set up a JV-AMC,’ he said.
Three JV-AMCs are currently in operation: JK AMC, Ari AMC and Arun AMC. JK AMC is a partnership between Kasikornbank and JMT Network Services, while Arun AMC is a collaboration between KBank and Bangkok Commercial Asset Management (BAM). Ari AMC is a joint venture between BAM and the Government Savings Bank.
In total, 86 asset management companies are licensed by the central bank.
The JV-AMC framework was first introduced by the central bank during the pandemic. The previous application window expired at the end of 2024.