The Bank of Thailand has instructed commercial banks to extend, until the end of the year, debt repayment periods for small and medium-sized enterprises, to help them cope with the impacts from the third wave of the COVID-19 pandemic.
Meanwhile, the central bank has allowed banks to pay interim dividends to their shareholders, not exceeding 50% of their net profits, for the first half of this year, but barred them from buying back their shares or capital instruments before their maturity dates, unless there are plans to replace them.
BoT Governor Sethaput Suthiwartnarueput said in a statement today (Friday) that the first wave of the COVID-19 pandemic, early last year, through to the third wave beginning in April this year has had widespread impacts on businesses, as well as on people in general, prompting the central bank to roll out several financial measures to help them and to introduce mechanisms for financial institutions to assist their debtors under the current difficult and uncertain situation.
Dr. Sethaput said that the extension of debt repayment periods for SMEs is not a general debt repayment extension, but intended for SMEs which are unable to resume normal business, making it difficult for banks to assess their cash flow for debt restructuring.
This measure will cover SMEs, which have debt of no more than 100 million baht, and banks have been told to expedite debt restructuring with these debtors.
In the statement, the governor said the central bank has been flexible in the enforcement of regulations, to encourage banks and other financial institutions to arrange debt restructuring with their debtors or to reduce the interest rates charged.
He also said that the central bank is considering whether to retain the 0.23% rate that financial institutions are required to send to the Financial Institutions Development Fund (FIDF), which is due to expire at the end of this year.
