The government has asked the central bank to review interest rates for credit cards and personal loans to try to tackle high household debt, the prime minister said on Tuesday, sending bank shares falling.
Gen Prayut Chan-o-cha said a range of measures prepared for solving debt problems include reducing peoples’ interest rate burden, debt repayment adjustments and promoting competition for lower interest rates.
The Bank of Thailand (BoT) has been asked to review the ceiling of interest rates and supervise credit cards, personal loans and auto title loans, he said.
“If our people still have a lot of debt and at a young age, it will affect their whole lives,” Gen Prayut told a briefing after a cabinet meeting.
The country’s household debt stood at 14 trillion baht at the end of December, equal to 89.3 percent of gross domestic product (GDP), among the highest in Asia.
The move sent bank shares falling 1.2% in early afternoon trade, with Kasikornbank down 2.3 percent and Siam Commercial Bank slipping 1.9 percent. Analysts said lower rates will hurt banks’ earnings.
Last year, the BoT reduced the interest rate ceiling for credit cards to 16 percent per year from 18 percent and that of personal loans to 24 percent to 25 percent from 28 percent, to help debtors cope with the impact of coronavirus outbreaks.
Thai PM seeks apology to the nation
Thai Prime Minister Prayut Chan-o-cha on Tuesday apologized to people whose vaccination appointments had been postponed after numerous hospitals suspended their inoculation drives.
Gen Prayut Chan-o-cha said the government had distributed 7 million vaccine doses to provinces nationwide, of which 6.5 million had been administrated to people so far.
He said he was closely following news about vaccine allocation and putting his best effort into tackling problems.
Many hospitals and jab stations across the country have postponed appointments after running out of doses soon after nationwide inoculation launched last week on Monday.
“We will find a way to solve the problems to ensure maximum benefit for people, and alleviate their worries,” said Prayut.
He gave the following explanation of how vaccine is allocated:
- Once vaccines arrive, the Public Health Ministry checks and delivers them to provinces nationwide.
- The number of vaccines allocated to each province is based on its population, its infection rate, its number of registrants via Mor Phrom (Doctors Ready) or other booking platforms, risks of infection, and economic importance.
- If the number of vaccines is insufficient, each province must prioritize the elderly and people with chronic diseases who have already registered for vaccination.
- If it is necessary to postpone the vaccination drive, each province must vaccinate registrants sequentially and not make them register again.
“As director of the Centre for Covid-19 Situation Administration, I would like to apologize for the many problems that have occurred so far,” said the PM.
He also insisted that the mass vaccination program was transparent and free of corruption.
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