BANGKOK, Nov 15 – Thailand’s Cabinet on Tuesday approved a debt moratorium for farmers and low-income earners with outstanding debts lower than Bt500,000, according to Deputy Finance Minister Boonsong Teriyapirom.
The project is intended to alleviate the financial problems of this segment of the public and aims to help them to use money wisely to rehabilitate their families and restore their well-being.
The debt moratorium will apply to customers of the Bank for Agriculture and Agricultural Co-operatives (BAAC) and the bank’s customers in the violence-impacted southern provinces of Yala, Pattani and Narathiwat. It includes customers using the services of the Government Savings Bank, the Small- and Medium-Enterprise Development Bank of Thailand (SME Bank), the Government Housing Bank (GH Bank), the Islamic Bank of Thailand, and the Secondary Mortgage Corporation, whose debts are non-performing loans (NPLs) or debts arising from debt restructuring.
Debtors must as well be in the Personal Income Tax system, while each must have their initial loans altogether in financial institutions of no more than Bt500,000 as of June 30 of this year.
Mr Boonsong said 12.48 per cent, or 775,090 of all accounts fall in this category for the six institutions above, with outstanding debts of about Bt90.5 billion, or 5.76 per cent of the overall outstanding debts of these banks.
The project will allow the debt moratorium of both initial loans and interests for three years, from Oct 1 this year to Sept 30, 2014. Once the project is finished, customers will start paying their debts according to new debt plans made by the six financial institutions.
During the suspension period, debtors cannot request further loans from the institutions but they can leave the project before the three-year period. They will also be offered vocational training programmes according to their geographic location and knowledge, as organised by Finance Ministry and related agencies.
Bank customers eligible to participate in the programme can register at all six financial institutions from today (Nov 15), while the registration and selection process will last for three months.