Waterlogged vehicles sit in front of Hop Inn hotel in Sakon Nakhon last week.
The Bank of Thailand has asked financial institutions under its supervision to ease debt repayment conditions for victims of floods that have ravaged several provinces in the northern, northeastern and central regions of the country.
“The Bank of Thailand is asking for cooperation from financial institutions, non-bank credit card services, personal loan and nanofinance providers to consider helping those affected by the floods both directly and indirectly as deemed appropriate,” said Somboon Chitphentom, the central bank’s assistant governor for the financial institutions policy group.
“Financial institutions can maintain the status quo for these troubled debtors to what existed prior to the floods,” he said.
Sakon Nakhon has been worst hit by the flooding, prompting Prime Minister Prayut Chan-o-cha to instruct authorities to ensure that most of the excess water is released into the Mekong River within a week.
The Bank of Thailand recently said the impact of the floods on economy had been smaller compared with the devastation in the South earlier this year, when most of the submerged areas was agricultural land.
The central bank is temporarily allowing credit card operators to lower the minimum payment requirement of 10% of due balance for cardholders who are flood victims. It has also asked the credit card operators to provide temporary credit lines in cases of emergencies, depending on the debtor’s financial status.
The relaxation takes effect immediately and lasts until the end of December.
Mr Somboon said financial institutions should consider throwing a lifeline by waiving interest and fees, relaxing payment conditions and restructuring debt to allow debtors to repair their residences, keep their jobs or steer their businesses through the hardship.
The central bank said personal loan providers are also able to provide similar temporary credit lines in cases of emergencies as deemed appropriate. The relaxation takes effect from Sept 1 until the end of the year.
Financial institutions will be required to report the amounts of these debts to the central bank each month, starting from August to December this year.
Meanwhile, Finance Minister Apisak Tantivorawong said the floods would not have a significant impact on Thai economic growth.
It will take time to digest the situation and assess economic damages, he said, adding that he was confident that the country’s economy would expand in the range of 3.5%-3.6% this year.
The Thai economy is picking up, as the country’s GDP has grown from 0.8% in 2014 and 2.8% in 2015 to 3.2% last year, Mr Apisak said.
Thailand’s economic growth potential from the Eastern Economic Corridor, expansion of Laem Chabang deep-sea port and the 10 targeted industries under the S-curve economic model is catching foreign investors’ eyes, he said.
“Investment in Thailand had been idle for the past many years, but when this government took the helm, it laid down a strategy for long-term growth and stimulated the economy,” Mr Apisak said.