BOT ponders ‘debt warehousing’ to help creditors, debtors through virus crisis

[webfact]

BOT ponders ‘debt warehousing’ to help creditors, debtors through virus crisis

By The Nation

 

BOT Deputy Governor Ronadol Numnonda

 

The Bank of Thailand (BOT) is consulting with capital market agencies, the Thai Bankers’ Association and private funds on a new initiative to manage debt.

 

The idea is to create a “debt warehousing” fund to manage debts owed to financial institutions, BOT Deputy Governor Ronadol Numnonda explained.

 

The aim is to limit the damage from borrowers unable to make repayments due to the impact of Covid-19.

 

Their debt will be “warehoused”, or suspended until the virus situation improves, when debtors will be able to buy back their debt and businesses, he said.

 

The scheme would incorporate a guarantee facility and mechanism to ensure debtors were not forced to sell assets at unreasonably low prices, as happened during the 1997 financial crisis. Under the new scheme, both creditor and debtor would have to agree on prices of any assets sold to pay off the debt, according to Ronadol. 

 

The new scheme is expected to be ready by the end of this year, once participants source the necessary funding. The BOT or bodies such as asset management companies might take the leading role in setting up debt warehousing, he added.

 

Thailand’s small businesses have suffered severe impacts from the pandemic. Despite signs of recovery, those in the tourism sector continue to suffer as countries around the world impose new lockdowns. However, hopes for the tourism industry were given a boost in recent days by Pfizer and Moderna’s breakthroughs in vaccine development.

 

Source: https://www.nationthailand.com/business/30398111

 

-- © Copyright The Nation Thailand 2020-11-18

 

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[ThailandRyan]

Debtors prisons on the horizon, going back in time it seems.

4 minutes ago, webfact said:

Under the new scheme, both creditor and debtor would have to agree on prices of any assets sold to pay off the debt, according to Ronadol. 

Sounds like the Loan sharks are back in business as they will have willing debtors to repay the loans, of course after terrorizing them and there families so they come into agreement, with the Banks and the Government being the largest of the loan sharks.  How will this work for Thai Airways....lol

[John Drake]

Thai middle class, what there is of it, is on an elevator headed to the basement.

[Cake Monster]

2 hours ago, webfact said:

Their debt will be “warehoused”, or suspended until the virus situation improves, when debtors will be able to buy back their debt and businesses, he said.

 

The scheme would incorporate a guarantee facility and mechanism to ensure debtors were not forced to sell assets at unreasonably low prices, as happened during the 1997 financial crisis. Under the new scheme, both creditor and debtor would have to agree on prices of any assets sold to pay off the debt, according to Ronadol. 

I really can see the Creditors ripping the guts out of the Business Owners over this.

They are not going to allow Debtors a " Free Time " of non payment on their Debts unless there is some kind of reimbursement over payments due, and much will depend on how long they have to carry the Debts for.

Shorter terms will be less of a hit for the Debtors, but for sure they will see themselves carrying the Debts long term, and quite honestly, who can blame them, as Covid has no BBF Date stamped on it.

 

[hotchilli]

4 hours ago, John Drake said:

Thai middle class, what there is of it, is on an elevator headed to the basement.

As you say.... "next stop ground floor" in the elevator from penthouse to no house.

All the family silver & gold trinkets will be pawned off to keep the sharks at bay.

[sammieuk1]

The deputy governor really means the covid crisis exacerbated into a monumental cluster  by an unelected self indulgent amature government to be technically correct  ????????