BANGKOK, Thailand – The Bank of Thailand (BoT) has introduced measures to promote the establishment of joint-venture asset management companies (JV AMCs), allowing commercial banks, specialized financial institutions, and non-bank financial entities to partner with asset management firms. The initiative aims to address non-performing assets (NPAs) and support borrowers with distressed loans, thereby strengthening the resilience of Thailand’s financial system.
Ms. Rung Mallikamas, Deputy Governor for Financial Institution Stability at BoT, explained that the central bank previously issued guidelines to encourage JV AMCs between financial institutions and asset management companies to support economic recovery following the COVID-19 pandemic. The original framework concluded in 2024.
Given ongoing economic uncertainties from domestic and global factors, which could affect business and household income—particularly for vulnerable groups—and in turn impact credit quality, financial institutions now require more flexible mechanisms to manage potentially rising NPAs.
Under the new measures, BoT permits commercial banks, specialized financial institutions, and non-bank entities to temporarily invest in asset management companies or entities involved in asset management via joint ventures. Institutions will have a two-year period to apply for JV formation, and the JV can operate for up to 15 years.
JV AMCs are required to assist distressed borrowers transferred to them, including debt restructuring and rehabilitation, taking into account the borrowers’ ability to repay while maximizing benefits to them. In addition, existing JVs formed by specialized financial institutions can now accept NPAs not only from other specialized financial institutions but also from commercial banks and non-bank entities.
BoT expects that these measures will provide financial institutions with effective tools to manage NPAs while ensuring resources are used to support borrowers in the recovery process. The joint-venture mechanism will enable continuous assistance for borrowers, helping them maintain personal or business operations, which in turn supports Thailand’s broader economic recovery. (TNA)
