Featured Product

    BOT Circular Introduces Changes to Reduce Bank NPLs

    October 29, 2020

    BOT issued a circular stipulating the rules on interest charge, default on debt repayment, and debt amortization. The objective of the circular is to help reduce the debt burden, create fairness in providing financial services to individuals, and reduce the incidence of non-performing debt in the financial system.

    Through this circular, BOT has introduced three important changes:

    • The default interest will be charged on the basis of "Actual default principal" only and does not include the principal portion of future installments that are not yet due.
    • Determination of interest rates for default on debt repayment by using the contractual interest rate plus not more than 3% per annum. This adjustment of the criteria will reduce the chance of default and it will also help to make the financial system more balanced.
    • Determination of the order of amortization by "Write down the longest outstanding installments first" so that the debtor knows the order of the amortization. This will help reduce the incidence of non-performing debt as well as help the debtor be encouraged to pay the debt continuously. 

    The announcement of determining the default interest rate calculation will take effect from April 01, 2021. The determination of amortization sequence will take effect from July 01, 2021. For the default on debt occurring before April 01, 2021, the financial service provider can apply the principles of the new announcement to consider the exemption or relaxation of defaulted interest to the debtor, as appropriate.

     

    Related Links (in Thai)

    Effective Date: April 01, 2021/July 01, 2021

    Keywords: Asia Pacific, Thailand, Banking, NPL, Debt Settlement, Credit Risk, Loan Repayment, BOT

    Related Articles
    News

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423