BOT Issues Updates on Debt Restructuring and Dividend Payment Policy
BOT published guidelines for debt restructuring to assist business debtors affected by the COVID-19 pandemic. Financial institutions can consider delaying the repayment period based on the debt repayment ability of each debtor. Financial institutions can also consider maintaining the same classification during the deferral of debt repayment, depending on the status of the debtor before availing this measure (no later than December 31, 2021). Financial institutions must also not regard the delay in repayment as a cause for breach of the terms of repayment under the contract.
With respect to its dividend payment policy, BOT has allowed financial institutions to pay an interim dividend not exceeding the dividend payout ratio of last year and of no more than 50% of the first-half net profits of 2021. Financial institutions are still prohibited from buying back their shares and from redeeming or repurchasing financial instruments included in Tier 1 or Tier 2 capital before maturity. To determine the dividend payment policy for 2021, BOT will assess the pandemic situation and the economic recovery trends and will follow up on the progress of financial institutions' debt assistance.
Related Links (in Thai)
- Notification on Guidelines on Debt Restructuring
- Guidelines (PDF)
- Notification on Dividend Payment Policy
- Circular on Dividend Payment Policy (PDF)
Keywords: Asia Pacific, Thailand, Banking, COVID-19, Regulatory Capital, Debt Restructuring, Loan Repayment, Credit Risk, Basel, BOT
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