Bank of Thailand recommends long term debt solutions as lockdown will last longer than expected

0
8693
Mr.Ronadol said short-term debt suspensions or restructurings are not proportionate to the suffering of bank clients as a result of the pandemic and lockdown restrictions while the pandemic is expected to be a factor in the country’s economy for a long time and it will take time for bank clients’ businesses to recover fully.

The Bank of Thailand (BoT) has pointed out that the prolonged nature and long-lasting effects of the COVID-19 pandemic mean commercial banks and clients should focus on long-term debt restructuring.

BoT deputy governor RonadolNumnonda said short-term debt suspensions or restructurings are not proportionate to the suffering of bank clients as a result of the pandemic and lockdown restrictions. The pandemic is expected to be a factor in the country’s economy for a long time and it will take time for bank clients’ businesses to recover fully.



He said this means both banks and their clients should focus on long-term debt solutions, adding that the central bank is in talks to provide incentives to banks, to encourage them to offer long-term debt restructuring packages to their clients.


Mr. Ronadol said banks can offer long-term debt restructuring without waiting for the BoT to amend related rules. The central bank is not going to determine the minimum length of long-term debt restructuring, as this depends on clients’ particular circumstances, and there is no “one size fits all” solution. (NNT)