The Bank of Thailand (BOT) decided to relax the dividend payment policy for 2021 by unwinding the dividend payout ratio limit (not exceeding the past payout rate). Financial institutions have been allowed to pay dividends for 2021 not exceeding 50% of the net profit of 2021. However, financial institutions still need to strengthen their capital levels to support a continuation of credit expansion during the beginning of economic recovery. BOT also published guidelines on long-term debt refinancing and debt consolidation measures to help debtors affected by the COVID-19 pandemic.
As part of these debt measures, BOT requires financial institutions and business operators to not charge prepayment fees for personal loans under supervision and retail loans temporarily until December 31, 2023. BOT also revised debt consolidation guidelines for retail debtors by expanding the scope to enable debt consolidation across financial institutions and/or other business operators. Finally, BOT issued fair credit management guidelines to provide support to debtors facing difficulties amid COVID-19 pandemic as well as to support financial services users to be aware of their rights. The guidelines cover the end-to-end process of credit, including development and offering of credit products, credit risk management, debt collection, provision of assistance to debtors with loan repayment issues, litigation process, and sale and transfer of debt to other creditors.
Related Links (in Thai)
- Press Release on Dividend Payment Policy (in English)
- Notification on Dividend Payment Policy
- Circular on Dividend Payment Policy (PDF)
- Press Release on Debt Refinancing and Consolidation Measures
- Notification on Guidelines on Debt Refinancing and Consolidation
- Guidelines on Debt Refinancing and Consolidation (PDF)
- Press Release on Credit Management Guidelines
- Notification on Credit Management Guidelines
- Credit Management Guidelines (PDF)
Keywords: Asia Pacific, Thailand, Banking, COVID-19, Regulatory Capital, Credit Risk, Dividend Distribution, Loan Repayment, Guidelines, NPLs, BOT
Previous ArticleCFPB Publishes 2021 Annual Fair Lending Report
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.