webfact Posted May 12, 2011 Share Posted May 12, 2011 Finance Ministry to Launch Credit Card Refinancing Program The finance minister is pressing forward with the government policy to alleviate debt for Thais with a credit card refinancing program. Yesterday, Finance Minister Korn Chatikavanij presided over the official opening ceremony of the People's Financial Policy Development Office, a new agency established to provide financial assistance and access to capital for people of all income levels. The office will also oversee formal and informal debt problems. At the same time, the finance minister unveiled the credit card refinance program to be implemented through three state-controlled financial institutes: the Islamic Bank of Thailand, the Government Savings Bank, and Krung Thai Bank. The program will offer credit card holders lower interest rates for refinancing their debts. The program's interest rates will be the minimum lending rate plus 3 to 5 percent or about 10 percent, which is about half the average annual percentage rate of 20 percent currently offered by credit card companies. Korn expects the program to be up and running later this month with the registration period starting in June. The finance minister has pointed out that the project will not overburden the state coffer because out of about the total of 190 billion baht in credit card debt, 170 billion baht is in good standing. Of all good standing credit card clients, about 35% pay the minimum of 10% every month, and these clients are the target of the refinancing program. The finance minister insists that the program is not designed to encourage credit card spending not funded by the government. The program will be run by the newly formed agency in conjunction with the aforementioned banks. Korn also denied that the program is aimed at attracting votes for the upcoming election, saying it has been in the works for quite some time. The Director the Fiscal Policy Office Naris Chaiyasoot has asserted that the purpose of the credit card refinancing program is to press lenders to reduce interest rates for outstanding debtors. The credit card companies will have to lower the interest rate for this group of customers or they will risk losing them to the state-controlled banks. -- Tan Network 2011-05-12 Link to comment Share on other sites More sharing options...
Thaddeus Posted May 12, 2011 Share Posted May 12, 2011 Borrowing money at a lower interest rate to pay off a high interest rate credit card will only work if most people then cut the credit card in half. Link to comment Share on other sites More sharing options...
geriatrickid Posted May 12, 2011 Share Posted May 12, 2011 Maybe its time to kick everyone in the butt. Cap the interest payments which will give an incentive to the credit card companies to stop the usury. Some of these consumers are incapable of understanding the cost of the credit cards. Link to comment Share on other sites More sharing options...
givenall Posted May 12, 2011 Share Posted May 12, 2011 Borrowing money at a lower interest rate to pay off a high interest rate credit card will only work if most people then cut the credit card in half. More importantly is to pay the loan eventually. In my experience,it is not very easy to get the money back here when is given to the people. So Ibet this will be a new subsidy for the Thais but not sure who we have to paythe losses eventually. Or better yet this is a counter to what Thaksin promised tothe taxi drivers, ha ha Link to comment Share on other sites More sharing options...
Seanextra Posted May 12, 2011 Share Posted May 12, 2011 LOL wow this place is going into a massive blackhole maybe like a mini World Financial Crisis right here in Thailand! I bet some SUVs will be coming up for Auction soon ! Link to comment Share on other sites More sharing options...
bangon04 Posted May 12, 2011 Share Posted May 12, 2011 LOL wow this place is going into a massive blackhole maybe like a mini World Financial Crisis right here in Thailand! I bet some SUVs will be coming up for Auction soon ! Credit cards are perfect for the average Isaan famiy / farmer - "Have money today - spend money today. No have money tomorrow - worry tomorrow" Yes - another round of new SUVs please, and maybe some iphones too. Gold - get it while you can... Link to comment Share on other sites More sharing options...
khaowong1 Posted May 12, 2011 Share Posted May 12, 2011 Link to comment Share on other sites More sharing options...
bangkokeddy Posted May 12, 2011 Share Posted May 12, 2011 Korn also denied that the program is aimed at attracting votes for the upcoming election, saying it has been in the works for quite some time. for sure. Link to comment Share on other sites More sharing options...
rreddin Posted May 12, 2011 Share Posted May 12, 2011 LOL wow this place is going into a massive blackhole maybe like a mini World Financial Crisis right here in Thailand! I bet some SUVs will be coming up for Auction soon ! Credit cards are perfect for the average Isaan famiy / farmer - "Have money today - spend money today. No have money tomorrow - worry tomorrow" Yes - another round of new SUVs please, and maybe some iphones too. Gold - get it while you can... Your witicism backfired on you. The average Isaan farmer deals in cash. The issue for them is not banks or credit card companies because the only bank that will deal with them is BAAC. The farmer must be a member of a co-operative to have an account with them and all members of the co-operative give cross guarantees. The problem is with unofficial money lenders who charge very high rates of interest. I live in rural Isaan. The only people round here with SUVs are wealthy Thais, civil servants and some farangs. Farmers are practical people. If he or she has a vehicle, it is a pickup truck. They are also canny. If they have a daughter who is married to a farang, it is the farang who is paying for the pick up truck and the insurance and the tax and the maintenance and the fertilizer needed for the farm and the interest on the bank loan (to buy the fertilizer)and.... Link to comment Share on other sites More sharing options...
swillowbee Posted May 13, 2011 Share Posted May 13, 2011 ... Thailand is a culture of non-payment ... Korn is only shifting the losses to Thai taxpayers ... credit card abuse will probably remain a chronic problem as long as there are Thais here. Link to comment Share on other sites More sharing options...
Anon999 Posted May 13, 2011 Share Posted May 13, 2011 ... Thailand is a culture of non-payment ... Korn is only shifting the losses to Thai taxpayers ... credit card abuse will probably remain a chronic problem as long as there are Thais here. With an interest rate of 10% the scheme should still make a profit therefore no subsidy from Thai taxpayers. Have you checked to see the indecent profits made by cc companies who charge 20% and more? Link to comment Share on other sites More sharing options...
timekeeper Posted May 13, 2011 Share Posted May 13, 2011 (edited) LOL wow this place is going into a massive blackhole maybe like a mini World Financial Crisis right here in Thailand! I bet some SUVs will be coming up for Auction soon ! Credit cards are perfect for the average Isaan famiy / farmer - "Have money today - spend money today. No have money tomorrow - worry tomorrow" Yes - another round of new SUVs please, and maybe some iphones too. Gold - get it while you can... Your witicism backfired on you. The average Isaan farmer deals in cash. The issue for them is not banks or credit card companies because the only bank that will deal with them is BAAC. The farmer must be a member of a co-operative to have an account with them and all members of the co-operative give cross guarantees. The problem is with unofficial money lenders who charge very high rates of interest. I live in rural Isaan. The only people round here with SUVs are wealthy Thais, civil servants and some farangs. Farmers are practical people. If he or she has a vehicle, it is a pickup truck. They are also canny. If they have a daughter who is married to a farang, it is the farang who is paying for the pick up truck and the insurance and the tax and the maintenance and the fertilizer needed for the farm and the interest on the bank loan (to buy the fertilizer) and.... and.........there are some very gullible farangs around. do you pay for your wife's family's agricultural needs? Edited May 13, 2011 by timekeeper Link to comment Share on other sites More sharing options...
rreddin Posted May 13, 2011 Share Posted May 13, 2011 LOL wow this place is going into a massive blackhole maybe like a mini World Financial Crisis right here in Thailand! I bet some SUVs will be coming up for Auction soon ! Credit cards are perfect for the average Isaan famiy / farmer - "Have money today - spend money today. No have money tomorrow - worry tomorrow" Yes - another round of new SUVs please, and maybe some iphones too. Gold - get it while you can... Your witicism backfired on you. The average Isaan farmer deals in cash. The issue for them is not banks or credit card companies because the only bank that will deal with them is BAAC. The farmer must be a member of a co-operative to have an account with them and all members of the co-operative give cross guarantees. The problem is with unofficial money lenders who charge very high rates of interest. I live in rural Isaan. The only people round here with SUVs are wealthy Thais, civil servants and some farangs. Farmers are practical people. If he or she has a vehicle, it is a pickup truck. They are also canny. If they have a daughter who is married to a farang, it is the farang who is paying for the pick up truck and the insurance and the tax and the maintenance and the fertilizer needed for the farm and the interest on the bank loan (to buy the fertilizer) and.... and.........there are some very gullible farangs around. do you pay for your wife's family's agricultural needs? In answer to your question: No I do not. The Buddha will provide, but I am not the Buddha! Sorry to disappoint you. Link to comment Share on other sites More sharing options...
anterian Posted May 13, 2011 Share Posted May 13, 2011 Borrow today, spend tomorrow, do a bunk the day after, seems to be the standard Thai concept of forward planning. When a Thai asks to borrow money it is simply a polite way of saying give me money. I think most expats learn this fact fairly rapidly. Thais give a new meaning to the words, "liquid assets". why bother refinancing the loans, cut out the middleman and just give the money to the brewers and distillers. Link to comment Share on other sites More sharing options...
timekeeper Posted May 13, 2011 Share Posted May 13, 2011 (edited) rrreddddin Your witicism backfired on you. The average Isaan farmer deals in cash. The issue for them is not banks or credit card companies because the only bank that will deal with them is BAAC. The farmer must be a member of a co-operative to have an account with them and all members of the co-operative give cross guarantees. The problem is with unofficial money lenders who charge very high rates of interest. I live in rural Isaan. The only people round here with SUVs are wealthy Thais, civil servants and some farangs. Farmers are practical people. If he or she has a vehicle, it is a pickup truck. They are also canny. If they have a daughter who is married to a farang, it is the farang who is paying for the pick up truck and the insurance and the tax and the maintenance and the fertilizer needed for the farm and the interest on the bank loan (to buy the fertilizer) and.... timekeeper and.........there are some very gullible farangs around. do you pay for your wife's family's agricultural needs? rrrrreddddin In answer to your question: No I do not. The Buddha will provide, but I am not the Buddha! Sorry to disappoint you. timekeeper i don't think anyone had any doubts about you not being the wise old Buddha........ Edited May 13, 2011 by timekeeper Link to comment Share on other sites More sharing options...
webfact Posted May 13, 2011 Author Share Posted May 13, 2011 UPDATE Central Bank Warns Govt about Credit Card Refinancing Program The Bank of Thailand governor has recommended that related agencies implement the credit card refinancing program with strict financial discipline. Meanwhile, credit card businesses have admitted that the program may force them to lower interest rates to stay competitive. Bank of Thailand Governor Prasarn Trairatvorakul said that he has not been reported on the detail of the Finance Ministry's credit card refinancing program. Prasarn, however, refused to comment on the program, pointing to the upcoming election. At any rate, the national bank governor urges the government to exercise financial prudence while implementing the program. Prasarn said it is important to support only 'good' borrowers in order to keep down the program's cost and maintain the country's financial stability. At the same time, he said credit card companies may have to consider lowering interest rates to keep customers. Meanwhile, Government Savings Bank oor GSB President Lersuk Chuladesa pointed out that the bank has attended a meeting with the Fiscal Policy Office, Krung Thai Bank and Islamic Bank of Thailand on how to execute the credit card refinancing program. Lersuk expects each borrower will be able to take out the maximum of 200,000 to 300,000 baht in refinance loan with 10 percent annual interest rate and a repayment period of 3 to 5 years. The GSB has already prepared 4.5 billion baht while the Islamic Bank has allocated one billion baht for the program. Lersuk expects the final details to be hammered out by the end of this month. Before joining the program, the borrower must cancel his or her credit cards and must be in good credit standing. The program aims to slash interest rates for good borrowers by half. Currently, the average annual percentage rate of credit card companies is about 20 percent. A credit card holder with 100,000 baht in debt would normally have to pay from 1,800 to 2,000 baht in interest. However by enrolling in the program, interest will be reduced to about 800 to 1,000 baht per month. Assistant to the President of Kasikorn Bank, Chartchai Payuhawichai has admitted that the program will have some short-term effects on competition among lenders. Credit card companies may have to consider lowering their rates to stay competitive. At any rate, Chartchai said the effects will be limited as 60 percent of its customers pay off their debts every month. He claims that the current interest rates offered by the commercial banks are not too high if substracting the fee exemptions and non-performing loan risks, the actually rate comes to only about 8 percent. Meanwhile, President and CEO of the CIMB Thai Bank Supak Sivarak has endorsed the program, asserting that it will ease customers' financial burdens and stimulate spending. Supak is confident that the scheme will not affect the national non-performing loan ratio as each bank has already carefully screened its credit card applicants. -- Tan Network 2011-05-13 Link to comment Share on other sites More sharing options...
MaiChai Posted May 13, 2011 Share Posted May 13, 2011 (edited) ... Thailand is a culture of non-payment ... Korn is only shifting the losses to Thai taxpayers ... credit card abuse will probably remain a chronic problem as long as there are Thais here. With an interest rate of 10% the scheme should still make a profit therefore no subsidy from Thai taxpayers. Have you checked to see the indecent profits made by cc companies who charge 20% and more? ็็Well it depends on NPLs... remember those?; didn't Thailand have problems with that before? Thailand is really a culture of non-payment: totally agree with this. Want a new car/motorbike? Get a repossessed one at a considerable discount on new. The only real benefit I see with this scheme is that it will allow some Thais to move their debts to a lower interest rate, especially from loan sharks. However, alot of Thais are not canny enough with money to make the switch? The Chinese have the right attitude; save and keep money. Guess its a cultural thing thats difficult to change? Expect another NPL crises some time soon? Edited May 13, 2011 by MaiChai Link to comment Share on other sites More sharing options...
timekeeper Posted May 13, 2011 Share Posted May 13, 2011 One more vote buying policy copied straight from the Thaksin vote buying textbook . Quite ironic ; coming fro, such Thaksin bashers . hey newbie, you on the red eye night shift? Link to comment Share on other sites More sharing options...
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