Thai Parliament has approved an emergency decree, to amend the Civil and Commercial Code, to reduce the interest rates charged for loan defaults.
Finance Minister Arkhom Termpittayapaisith said the law is being amended, during the prolonged COVID-19 pandemic, to help debtors who have to pay interest as high as 7.5% per annum. The average current savings interest rate in the country is just 0.5% per annum.
He said that amending the law, to cut the statutory interest rate, was of utmost urgency to help debtors, especially SMEs seriously affected by COVID-19. The bill fixes the rate in contracts, where no rate is specified, at 3%, and the rate for defaults at 5%.
The minister said, under the current law, some creditors take advantage of their debtors by charging excess interest, pushing them further into debt. (NNT)