NLA passes new loan bill that makes overcharging interest rate an offence

 

 

BANGKOK: -- The National Legislative Assembly on Thursday unanimously approved in principle a bill banning creditors from overcharging interest rate on their debtors beyond the limits permissible by law.

 

A total of 169 votes were casted in support of the bill and the NLA appointed an 18-member panel to scrutinize the bill within 60 days after which the scrutinized bill will be tabled back to the NLA for the second and final readings.

 

The essence of the bill is that charging an interest rate on loans beyond the legally permissible limits is an offence liable to two years imprisonment and/or a maximum fine of 200,000 baht. 

 

Full story: http://englishnews.thaipbs.or.th/nla-passes-new-loan-bill-makes-overcharging-interest-rate-offence/

 

-- © Copyright Thai PBS 2016-09-01

But how likely is enforcement?

12 minutes ago, halloween said:

But how likely is enforcement?

 

I guess that depends on the perpetrator...

even the article says it is already law that creditors cannot overcharge. All they are doing is raising the penalties, which will still not be enforced.

 

i spoke to a thai person a while ago who was lending money out at 10% per month. They seemed quite proud of it. They also knew it wasn't legal. I asked "How do they get the money to pay you back?" With a shrug of the shoulders they answered "Borrow money from someone else". 50% of the profit was going to a debt collector/enforcer.

Any idea what the permissuble rate is?

They should come to our village where the daily rate varies between 20 and 50%.

Yes, I would like to know the permissible rate also.

 

As usual unclear rubbish. Where is the permissible rate published?

1 hour ago, maoro2013 said:

Yes, I would like to know the permissible rate also.

 

As usual unclear rubbish. Where is the permissible rate published?

 

In the law,  Civil and Commercial Code, Section 654 that say maximum 15% pr. year or 1.25% pr. month.

36 minutes ago, Finkelstein said:

In the law,  Civil and Commercial Code, Section 654 that say maximum 15% pr. year or 1.25% pr. month.

Yes, so flat rate, not compound?

 

What do banks charge, any examples?

If this is like any of other laws designed to prevent corruption then it would also be a crime to pay interest on a loan that is was in excess of the law thus making it impossible for anyone to complain without also implicating themselves in a crime (bribing traffic officers is a crime - thus anyone who reports being forced to pay a bribe just confessed to a crime).  

 

Just for good measure they should allow for treble penalties if the loan shark decides to sue for defamation of character.  

 

Now, that is true Thai justice 

 

In Thailand there are like a million laws and rules, not many of them are properly

enforced, most of them are has no relevant to modern life and the others

are simply for public consumptions to show only..... and this one is another

fine example....

2 hours ago, Finkelstein said:

In the law,  Civil and Commercial Code, Section 654 that say maximum 15% pr. year or 1.25% pr. month.

But credit cards can charge more

21 hours ago, halloween said:

But how likely is enforcement?

Yes these new laws are shot out helter skelter. Makes the government look good. Its like all the laws on the books here going back a hundred years or more. Remember the great bridge raid? They dusted off an old obsolete law and hit them with that. Not to worry if you get in trouble here they will find a custom made law that fits you.  

Ahhh yes,and all the mafia loan sharks,are going to simply acquiesce to this demand.

2 hours ago, whatproblem said:

But credit cards can charge more

I think they call it something else, so it would be : Interest rate + fee + service charge + any penalty charges  and then you can end up near double 30% p.a. I would think you could check CityBanks rates as they would be the most expensive (greedy) in my mind.

I had an experience some time ago some family had borrowed from mafia some money, every day the collectors turned up asking 800.- THB - they had big problems finding that much money so I started to calculate - with 800.- every day and an average of 30 days in a month that would amount to 24,000 /month - I was thinking the most insane interest rate possible would to me be 10-15% /month. So meaning that the family had an outstanding balance of at least 160,000.- and not paying the loan only interest.

I thought I would help, so I asked my wife to call and ask how much they owed and suggest I paid the loan down and if ever they needed money they could ask. So she did - it turned out that the family had a loan of 4,000.- paying a staggering 20% each day in interest. Talk about being shocked.

So we went there, met with the mafia guys, paid the debt (with the day's interest) and used the rest of the day educating the family about how poor people is kept in poverty by richer but scrupleless people. Even CityBank are saints compared.