Loans – GSB adjusts requirements for loans
State-owned Authorities Financial savings Bank (GSB) plans to regulate its loan standards to collateral-based lending from the present cashflow-based lending to help individuals experiencing a liquidity crunch.
The adjustment course of ought to take 1-2 years, stated GSB president and chief government Vitai Ratanakorn.
As Thailand’s economic system has been massively affected by the persevering with Covid-19 outbreak, the cashflow-based lending standards for loan evaluation shouldn’t be relevant over the subsequent 1-2 years as a result of financial actions have been dampened by the pandemic disaster, stated Mr Vitai.
Some companies have needed to cease working quickly, leading to losses of revenue, he stated.
Banks beforehand used the collateral-based lending standards for loan evaluation earlier than adopting the cashflow-based lending standards, stated Mr Vitai.
If the GSB doesn’t undertake the collateral-based lending standards, the bank wouldn’t be capable to present loans, he stated, creating an opposed impact that may hurt the individuals greater than the bank itself.
Lack of revenue and failure to acquire further liquidity by lending might trigger loans to show into non-performing loans, stated Mr Vitai.
GSB will begin analysing loan evaluation by the collateral-based lending method for its auto hire-purchase loans.
Automobiles shall be used as collateral belongings.
The bank’s annual rate of interest for this loan product is capped at 18%, decrease than the market fee of 24-28%.
He insisted GSB is not going to incur losses from its auto hire-purchase loans as a result of the 18% rate of interest is the best amongst loan merchandise provided by the bank.
Small and medium-sized enterprises also can use land as a collateral asset to acquire loans from GSB, Mr Vitai stated.
The bank prices an annual rate of interest of 5.99%, decrease than the repurchase rate of interest of 15-30%, he stated.