Thai banks become more vigilant to give out loans to customers

[webfact]

Banks become more vigilant to give out loans to customers

BANGKOK, 1 May 2014 (NNT) - According to the National Credit Bureau (NCB), banks have become three times more prudent in conducting background checks on loan borrowers.

NCB Managing Director Surapon Opassathien revealed that banks and financial institutions have checked on his agency more frequently regarding their customers’ credit history, as they are raising their standards to hand out loans.

The banks have stipulated that customers must earn a minimum income of at least 8,000 to 10,000 baht per month nowadays to take out loans, which is higher than their previous criteria of 5,000 to 7,000 baht per month.

At least 3 million requests per month have been made by financial institutions to the NCB this year, which is three times higher than last year. The NCB president further said that the economic slump in Thailand has made it challenging for people to pay off their debts.

Mr. Surapon declared that out of the 47 million accounts that had taken loans, the number of people who defaulted on their loans in a one-month time frame increased by 30 percent. Nonetheless, some financial institutions are easing up on their customers by postponing their debt payments or allowing them to avoid paying interests on loans.


-- NNT 2014-05-01

[dcutman]

The banks have stipulated that customers must earn a minimum income of at least 8,000 to 10,000 baht per month nowadays to take out loans, which is higher than their previous criteria of 5,000 to 7,000 baht per month.

The loan sharks must be overjoyed with this news.

[Costas2008]

A little too late.

Banks used to give easily loans, especially if you had a piece of land or house for collateral.

Nowadays, defaults start soaring as the people can't pay back.

Same as in Europe and USA.

We are going to witness many repossessions in the future, and people are going to suffer.

Also as put on another article on TV, Thais are not very good in managing their finances.

Hope things will not deteriorate as much as in Europe, but I have my doubts.

[clockman]

Tip of the iceberg,! Loans sharks. Are in every village

[issanaus]

Thai banks have been very slack when it comes to checking on the ability of potential borrowers to pay, while this move is in the right direction it will have consequences. This amounts to a tightening of the money supply which at time where there are other economic stresses will add to downward pressure on economic activity. The inability to roll over one loan for another will in the short to medium term increase defaults.

Given the state of the economy this will reduce BOT's ability to increase interest rates if the TBH comes under pressure due to ongoing economic and political uncertainty.

It will be interesting to see if the newly found prudence by the banks will be reflected in their provisions for bad and doubtful debts.

[Thai at Heart]

Hahaha.

Well that is all a little late now isn't it. Its like the bloody ratings agencies changing ratings AFTER stuff goes wrong. Credit risk is a constant measure, and shouldn't be something that varies very much over time.

[geoman1976]

5 years from now those same banks are going to be more vigilant about raising interests to an unaffordable amount and repossessing the purchases made with the loans. Wealth consolidation as its finest. Smart people learn from their mistakes, WISE people learn from the mistakes of others...hello????!!!!

[Thaiisnotrequired]

IF THE BANKS HAD been more vigilant, when they actually needed to be 8 years ago, as opposed to suddenly now adopting 'farang' terms of practice and vigilance, there wouldn't be an extra 8 million extra SUVs with drivers driving like maniacs on Thai roads.

[metisdead]

A trolling nonsense post has been removed as well as the replies.

[3NUMBAS]

'except when borrower is friend of bank manager ,then can borrow unlimited at zero interest ,and pay kickback under table ' khap

[Dogmatix]

'except when borrower is friend of bank manager ,then can borrow unlimited at zero interest ,and pay kickback under table ' khap

Are you talking about Krung Thai Bank's history of being used as a piggy bank by politicians in power? No need to pay interest or principle or go to jail.

[NongKhaiKid]

Will this include loan to the caretaker government ?

[Benmart]

'except when borrower is friend of bank manager ,then can borrow unlimited at zero interest ,and pay kickback under table ' khap

Please provide an example.

[belg]

and than you wonder, as a farang, living here, with plenty of money on your bank account with the bank, you apply for a credit card, and you get denied... because you don't work ...

than you state, you do not need to work (anymore) and have tens, hundreds of time more in savings than what a thai earns per month, the answer is still ... NO

but for farmers & low working labour, they seem to get it without any fuzz...