Thailand's Banks Sitting on Cash Pile: Struggle Between Lending and Liquidity

[snoop1130]

 

Thailand's banking sector is currently dealing with a large surplus of cash, as reported by a Bank of Thailand (BoT) assistant governor. Despite this, the central bank hasn't tightened its lending rules, suggesting banks remain cautious about giving out loans.

 

In a piece on the BoT website, Assistant Governor Sakkapop Panyanukul notes that banks determine who to lend to based largely on whether those borrowers can pay back. For the past ten years, banks have consistently held onto considerable excess cash.

 

Sakkapop highlights that this is clear from the big deposits and investments that commercial banks have with the central bank, ranging from 4 to 5 trillion baht (around US$115.64 to US$144.55 billion).

 

 

The Thai government views high household debt as a hurdle to boosting the economy, particularly after the pandemic. To counter this, they are pushing banks to offer more loans to help spark economic growth.

 

Sakkapop further mentions that while the central bank's lending guidelines stress setting reasonable payment plans for borrowers, they don't heavily control how banks decide to lend.

 

File photo for reference only

 

-- 2024-11-26