The new governor of the Bank of Thailand has vowed to focus more on targeted measures alongside monetary policy to deliver tangible results and provide meaningful support to the public.
Vitai Ratanakorn, the chief of the central bank, said the regulator aims to continue implementing targeted measures to support the economy, while maintaining financial stability and addressing specific issues. These measures will complement the central bank’s monetary policy to enhance overall effectiveness, he said.
‘Addressing household debt is a priority for all relevant agencies, including the central bank, the government, the Finance Ministry, and financial institutions,’ said Mr Vitai.
‘Debt resolution via asset management companies [AMCs] should be based on a social AMC model to efficiently assist household borrowers. The AMC approach is expected to be finalised this month, with implementation scheduled for early next year.’
Under the Finance Ministry’s guidance for resolving household debt via the AMC mechanism, the government is primarily focused on borrowers classified as non-performing loans (NPLs), with a maximum debt of 100,000 baht per debtor. This definition would cover more than 2 million NPL borrowers.
Mr Vitai said eligible NPLs would come from four types of lenders: commercial banks, specialised financial institutions (SFIs), non-banks affiliated with banks, and standalone non-banks. The debt resolution will be implemented in phases.
Initially, the programme will address NPLs from banks, bank affiliates, and SFIs. NPLs from banks and their subsidiaries will be managed by the state-owned Sukhumvit Asset Management, while SFIs’ bad debts will be handled by Ari AMC, the joint-venture AMC, which is a collaboration between Government Savings Bank and Bangkok Commercial Asset Management.
In addition, Mr Vitai said the central bank has no plans to establish a sovereign wealth fund, as such a financial tool would not help mitigate baht appreciation.
The regulator typically manages the exchange rate through foreign reserves and overseas investments in US dollars.
Year-to-date the baht has appreciated by 4.5% against the US dollar, easing from an 8% appreciation recently.
In separate news, the Thai Bankers’ Association has called for the development of an individual credit scoring system to build a stronger credit culture, promote financial discipline, and encourage responsible lending and borrowing as part of efforts to address household debt.
Under this proposal, all types of loan service providers, including savings cooperatives and the Student Loan Fund, would be required to report borrowers’ credit data to the National Credit Bureau. This initiative is expected to improve data sharing across the country’s financial system, said Piti Tantakasem, chief executive of TMB Thanachart Bank, which oversees debt resolution under the TBA’s roadmap.