Bangkok: The Bank of Thailand (BOT) has announced the expansion of its debt relief initiative, 'You Fight, We Help' Phase 2, which now includes the 'Pay, Cut the Principal' measure and broadens the scope of existing measures 'Pay Directly, Maintain Assets' and 'Pay, Close, Finish'. The initiative aims to assist 1.8 million debtors, representing a total debt value of approximately 310 billion baht.
According to Thai News Agency, Ms. Suwannee Jesadasak, Assistant Governor of BOT's Financial Institutions Supervision Group, stated that despite economic uncertainties, many vulnerable debtors continue to struggle with debt repayment. To address these challenges, the Ministry of Finance, NESDB, BOT, commercial banks, and non-bank financial institutions have decided to extend the registration period for the Khun Su Rao Chuay Phase 1 project and offer additional support under Phase 2. These efforts are designed to aid debtors with viable prospects for recovery, preventing them from defaulting while maintaining financial discipline. The updated qualification process will remain in effect until October 31, 2024, similar to the first phase.
Debtors who previously registered for Phase 1 but did not meet the criteria, or those with new qualifying contracts under Phase 2, are encouraged to reapply. However, debtors awaiting creditor feedback from Phase 1 evaluations will have their qualifications reassessed for both phases without needing to re-register.
Ms. Potjaman Kangwankraipaisan, Director of the Financial Services Protection and Inspection Department at BOT, highlighted the enhancements made in Phase 2, which are designed to provide more comprehensive assistance to vulnerable debtors of commercial banks and financial institutions. The measures include:
Measure 1 'Direct Payment, Asset Retention' extends eligibility to debtors with over 365 days of overdue payments and those with a shorter history of delinquency. This expansion helps debtors with manageable credit limits retain their collateral, such as homes, vehicles, and business properties.
Measure 2 'Pay, Close, Finish' raises the debt ceiling for individual debtors in non-performing loans (NPLs). Unsecured loans like personal loans and credit cards now have an increased limit of up to 10,000 baht per account, while secured loans, such as home or SME loans, have a limit of up to 30,000 baht per account, facilitating a quicker resolution of non-performing debts.
Measure 3 'Pay, Cut the Principal' introduces a new approach for unsecured loans with outstanding debts under 50,000 baht per account in NPL status. This measure restructures these debts into installment repayments over three years, with paid installments directly reducing the principal. Interest accrual is suspended and waived if the debtor meets the specified conditions, thereby easing the immediate and future debt burden.
The inaugural 'You Fight, We Help' Phase 1 project registered 1.4 million debtors, encompassing 1.9 million accounts by its conclusion on June 30.