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Can Bangkok Bank do this?


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Asking this on behalf of a Thai friend.

He borrowed  1 MIl. Baht from his local BKK Bank last year, nd has since kept up repayments as required.  Las week the manager called him into the bank and asked him to reduce his loan, and repay asap., as the loan term was too long.  Simply not possible for friend (C) to repay, as he told the manger.  manger then suggested that he took the land papers to another bank and borrowed another 1 MIl.  to repay BKK Bank.

C assures me that he has kept up his repayments and never missed any, but cannot repay loan any quicker.  Asked me to help him!  No way do I have 1 Mil. spare to lend a friend.

My question is;  can BKK bank do this? Can the manager simply change the terms of a loan agreed and signed?

I suspect that manger has overreached on his loans, and is trying to reduce his loan book before head office ask embarrassing questions, and is trying to put pressure of the most vulnerable clients.

If this was my bank in UK I would simply tell the manager to  get stuffed as i was keeping to the loan terms.  If he protested I would go the bank complaints dept. or banking Ombudsman, but of course, TIT, and C is overawed by bank manager.

if this sort of thing happens regularly, then I can see why nobody wants to do business in Thailand.

Ny suggestion as to what C might do, as repaying the loan early is not n option, nor is selling the land, as values are down because of Covid.  I am told hat nobody want s to buy land today.

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Something doesn't square up in your friend's story. A million baht is hardly even a rounding error to the bank, so to not honor a contract is not at ALL in the bank's interest or reputation. It all comes down to the contract and the proof of your friend's payment history.

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Me thinks your friend has not told you the whole story...left out some important details regarding the loan and his payments.  If he had been fully complying with the loan requirements the bank would not bother him.

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I have no seen the loan contract, nor would it do me much good a it is in Thai.  For what it is worth, I believe that my friend has been repaying his loan as the contract requires, and is not trying to scam me.

My initial thoughts were that the bank manager or his friends wanted the land, and were trying to conjure up a situation where friend either has to sell in a hurry, cheaply, or the bank van re-possess the land and sell on.

I am told that nobody is buying land now, so prices are low.  These seems logical given the state of the Thai economy,  so why would a bank want to re-possess a piece of land it might have trouble selling?

To me nothing else makes sense, and TIT, e can't expect a bank manager to be honest can we?

I don't bank with BKK Bank, but my experiences with my bank suggest that customer service is not part of Thai banking, nor i consumer protection.

 

My advice to friend is that he keeps up his repayments and ignores any further 'threats ' from he manager

 

One reason why I would NEVER borrow money from a Thai bank..  if i could live in Thailand without using a Thai bank, then I would

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Puzzled, I pressed Chamrong for more details of tis loan.

It seem that he borrowed 1 MIl. with repayments over 30yrs., and this might be the problem..   Bank want him to reduce his repayment time.

I an only ask why on earth he bank would offer a loan with the repayment so long.  Chamrong will be 77 when or if he repays the loan, surely past the life expectancy of a rural Thai male?  No ban in UK would offer a loan with repayments to such an age.  Has someone in bank been overgenerous and now getting cold feet?

I have been in Thailand long enough to know that many Thais have 'unrealistic' ides of their ability to repay loans,  and I am sure the bank is well aware of this.

 

Now I know more facts, (I should have asked more before starting this post,)  I want nothing more to do with this.  I have learned not to ever lend money to a Thai, as they do not consider any reason to repay a 'rich farang'.  Up to him and the bank. If they think they will get their money back, good luck to them

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3 hours ago, Robin said:

Puzzled, I pressed Chamrong for more details of tis loan.

It seem that he borrowed 1 MIl. with repayments over 30yrs., and this might be the problem..   Bank want him to reduce his repayment time.

I an only ask why on earth he bank would offer a loan with the repayment so long.  Chamrong will be 77 when or if he repays the loan, surely past the life expectancy of a rural Thai male?  No ban in UK would offer a loan with repayments to such an age.  Has someone in bank been overgenerous and now getting cold feet?

I have been in Thailand long enough to know that many Thais have 'unrealistic' ides of their ability to repay loans,  and I am sure the bank is well aware of this.

 

Now I know more facts, (I should have asked more before starting this post,)  I want nothing more to do with this.  I have learned not to ever lend money to a Thai, as they do not consider any reason to repay a 'rich farang'.  Up to him and the bank. If they think they will get their money back, good luck to them

It's SOP for banks to monitor their lending portfolios and they are always well aware of their poor or non-performing loans.  Loans in arrears are obviously loans to target for being at risk.  But as things change in the economy (local/national/international) or change specifically for the debtor, banks can and do take action.

 

For example, maybe the particular bank has exceeded their required ratio of loans <20 years and have been asked by head office to fall into line - this entails motivating some customers to restructure their loans or repay and move on.

 

Banks also monitor customer activity.  Maybe your friends debt servicing ability/ratio has been compromised in  the eyes of the bank due to a changed income structure, or they fear that if interest rates rise by X% that his ability to repay may be an issue.  The algorithms they use to examine their database can be quite clever.

 

Commercial entities usually have covenants that they must meet on a quarterly and/or annual basis to retain their loan or to have the interest rate maintained at a particular level. These covenants usually relate to equity ratios, loan servicing to income ratios, shareholder equity etc.

 

Usually the housing market is so stable (until of course it becomes unstable) that you never hear from your bank if you keep up the payments.  But when banks start to examine their loan portfolios with a new set of risk parameters, that's when some customers on the edge of the bank's comfort zone get a bit of a shock.

 

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On 10/28/2021 at 11:05 AM, Robin said:

I have no seen the loan contract, nor would it do me much good a it is in Thai.  For what it is worth, I believe that my friend has been repaying his loan as the contract requires, and is not trying to scam me.

You can always take a look at the bank book, it will show deposits and withdraws/loan payments, no translation needed.

Your "friend" might be trying to get your money so he/she can shorten that 30 year loan at your expense.  In my younger days I got caught up on the wrong end of a motorcycle sale and tried to help my "friend" by letting him pay for the bike in payments, after a few months the friend decided he didn't want to pay me anymore and I was left holding the empty bag.  I spoke with a lawyer and after explaining my situation, the 1st thing he asked me was "Are you a bank?", obviously I said no, then he said "Never get into an agreement like this again, if they need money let them go to a bank."

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On 10/27/2021 at 10:14 AM, Gsxrnz said:

I'm an ex-banker back in Farangland.  Every loan contract I was ever party to gave the bank essentially unlimited powers to reclaim their loan for any reason they so desired. They don't usually do this because they're in the business of lending money - in fact they don't really want their customers en masse to repay the money because then they have to find somebody else to lend it to.

 

The 20 page contracts all look legit with all the bank's and borrowers obligations and rights clearly outlined and enshrined in stipulated laws and statutes.

 

But buried in the fine print there is always the clause that in layman's terms states that if certain conditions arise the bank can, regardless of all/any terms of the contract, claim their money back and/or seize the property at their whim. The clincher is that the "certain conditions" are always vaguely described and the contract allows the bank to decide at their sole discretion what those conditions are and if/when the conditions are met. Bit of a Joseph Heller "Catch -22" situation.

 

The borrower may be able to seek satisfaction from an onbudsman or similar, or initiate legal action.  And in the West there is always a consumer protection organisation that may be willing to fight for you.

 

 

 

W

Confirms my opinion of bankers being bottom feeders in the pond. ☹️☹️

 

 

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