Beginning January 1 next year, commercial banks in Thailand are poised to impose the central bank’s directive for users to pay at least 8% of their total monthly credit card expenditure. In their present scheme, these banks only require customers to offset a mere 5% of their total monthly credit card expenditure.
This new guideline – enforced by the Bank of Thailand (BOT) – means that for each credit card transaction, the minimum payment will rise to 8% of the total spent, a significant jump from the current 5%.
This shift, expected to last for a period of one year, is designed to gradually readjust the credit card culture, leading up to an increase to a 10% minimum payment by January 1, 2025. Beyond the scheduled increase in installment payments, this 10% repayment rate will also be mandatory for fresh purchase commitments.
During the grim times of the global Covid pandemic, when people were facing financial hardships, the BOT had graciously lowered the installment percentage to 5%. Nevertheless, with the new rules coming into effect, they are once again reverting to the pre-pandemic minimum repayment rates of 10%.
The BOT has explicitly asked commercial banks to keep their clientele informed about the upcoming changes in the minimum repayment rates. This directive is the central bank’s way of gradually readjusting borrowers back to the pre-pandemic norms.
Already getting into action, Bangkok Bank – a leading financial institution in the heart of the capital city – is reported to have initiated communication with its customers about this imminent shift in policy. It joins other commercial banks in the country who are mobilizing to enforce the BOT’s directive, thereby ushering in a more responsible credit culture across Thailand.