Finance Minister vows low loan rates

 

FILE photo

 

BANGKOK, 13th August 2018 (NNT) - Finance Minister Aphisak Tantivorawong has assured that state-owned banks will maintain the lowest possible loan interest rates to alleviate the consumers' burden. 

State-run banks will keep mortgage rates cheap to comply with the government's policy of encouraging people to have their own homes, Mr Aphisak said. 

Although the central bank's Monetary Policy Committee has held the policy rate unchanged at a near-record low of 1.5 percent, market rates for fixed-term loans such as auto hire purchase and teaser rates for mortgages are inching up as commercial banks bet that a policy rate hike is just around the corner. 

The minister said interest rates can either be raised or cut, depending on the financial requirement of commercial banks in the future.

 

-- nnt 2018-08-13

 Profit is the only game for banks, how ever you want to sugar coat it khun Aphisak,

a speeding up on decisions may help some.

25 minutes ago, leeneeds said:

 Profit is the only game for banks, how ever you want to sugar coat it khun Aphisak,

a speeding up on decisions may help some.

Profit is the only game for all companies, not only banks. Maybe they should allow foreign banks to enter the Thai market. That might shake things up. There "might" be a kartel now that the banks have secret agreements on loan rates, if foreign banks enter that might break the kartel. That said, it also might be that the risk of defaulting is so much higher here as in the west that the extra interest is justified to offset the costs of a higher default rate. Only way to know for sure is to let foreign banks enter the fray. 

2 minutes ago, robblok said:

Profit is the only game for all companies, not only banks. Maybe they should allow foreign banks to enter the Thai market. That might shake things up. There "might" be a kartel now that the banks have secret agreements on loan rates, if foreign banks enter that might break the kartel. That said, it also might be that the risk of defaulting is so much higher here as in the west that the extra interest is justified to offset the costs of a higher default rate. Only way to know for sure is to let foreign banks enter the fray. 

Foreign banks are already here. Citibank, Maybank and UOB are foreign banks. 

Just now, Eric Loh said:

Foreign banks are already here. Citibank, Maybank and UOB are foreign banks. 

Thanks, I did not know that.. so if they are already here what is your take on all of this. Are they conspiring with Thai banks to keep the rate high or is the rate justified because of higher default rates ? 

 

For a kartel to be successful secret (and illegal in most countries) price agreements have to be made. In my country this has happened with builders of roads and such. So its certainly not unheard off in other countries.

This will benefit business and people in debt,the folks 

that are prudent and dont spend money they don't have,

try to save a few THB every month,will be at a disadvantage,

where interest rates on their savings does not even cover inflation.

 

regards worgeordie

 

Great news, time to get a new Benz!

41 minutes ago, robblok said:

Thanks, I did not know that.. so if they are already here what is your take on all of this. Are they conspiring with Thai banks to keep the rate high or is the rate justified because of higher default rates ? 

 

For a kartel to be successful secret (and illegal in most countries) price agreements have to be made. In my country this has happened with builders of roads and such. So its certainly not unheard off in other countries.

All banks local and foreign abide to the Thailand laws and BOT regulations. They have their own policies on lending and they will incorporate their own best practices and their  reputation in their policies. This low interest rates are only for state control banks like GSB. 

4 minutes ago, Eric Loh said:

All banks local and foreign abide to the Thailand laws and BOT regulations. They have their own policies on lending and they will incorporate their own best practices and their  reputation in their policies. This low interest rates are only for state control banks like GSB. 

They were not only taking about state controlled banks but also commercial banks.

 

The minister said interest rates can either be raised or cut, depending on the financial requirement of commercial banks in the future.

 

I understand that banks have to abide the laws.. but it does not always happen that way price agreements can be made (illegal) but can be made. 

 

I just ask your opinion about why the rates are higher than in the West. IMHO 2 options, one there is a higher default rate so higher rates are justified. 2 they are making far more money in the west possibly by illegal agreements among a group of banks. 

 

I am just curious why there is such a difference between the west and here. In principle the difference between the BOT rate and banks rate should be similar to those in Western countries. But it seems they have a higher margin here. 

 

BOT rate is low 1,5% in the west its lower around 0% lower but the actual interests rates are more then 1,5% lower in the west. Just wondering if that is because of lack of competition (agreements among banks) or justified by a higher default rate. 

 

Anyway I was just asking you if you had an opinion about it, as I don't really know what reason it could be. 

 

 

 

 

5 hours ago, webfact said:

Finance Minister vows low loan rates

That's not what people want. They want free take away money, the same like you cabinet ministers and civil servants have.

7 hours ago, webfact said:

commercial banks bet that a policy rate hike is just around the corner. 

Somprawin Manprasert, chief economist at Bank of Ayudhya  expects it to happen this November. Tim Leelahaphan, an economist at Standard Chartered Bank (Thailand), forecast the increase will be split in two and come at different times before the end of this year, each time 0.25 per cent, resulting in a rate of 2 per cent.   

http://www.nationmultimedia.com/detail/business/30352010

Government mandated official interest rates are becoming irrelevant as the actions by the Big 4 banks in Oz have shown. The official rate can be 1.5% but your mortgage can be 6%.....and all blamed on the cost to the banks on ' borrowing ' money.  And something like 40% plus of bank income  it is from account keeping fees and ATM charges.  Whatever happened to the bank manager being an astute financier who values your deposits that he could then lend at a mark up? 

Now they charge you to keep your money in the bank and can charge you for withdrawing it!!! 

Great, time to  borrow  more, no  need  to worry about payback....whats  payback anyway??