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State Eyes Loan Criteria to Tamp Down NPLs

By on Mar 29, 2016 in Property News

The Bank of Thailand has asked the Government Savings Bank (GSB), GH Bank and Krungthai Bank (KTB) to jointly set approval criteria for pre-financing loans for the government’s low-cost housing scheme under the Pracha Rat (People’s State) initiative to prevent loans turning sour in the future.

“The central bank wants the three banks to jointly set the lending criteria for property developers participating in the cheap-housing scheme because these banks don’t have expertise in pre-financing for real estate projects,” said GH Bank senior executive vice-president Chatchai Sirilai.

Under the scheme, the three banks will lend 10 billion baht each to project developers. The banks will charge 4% for the first two years, followed by the average minimum lending rate minus one percentage point throughout the remainder of the term.

Apart from the 30 billion baht in pre-financing, GH Bank and the GSB will lend another 20 billion baht each for mortgages to the low-cost housing scheme. Both banks will charge no interest for the first year, 2% for the second and third years, 5% for the fourth to sixth years and floating rates for the remainder.

With the special rate and relaxed debt-servicing limit, those who buy or lease homes priced 700,000 baht or less will pay a monthly rate of 3,000 baht for the first three years, 4,000 from the fourth to the sixth years and 4,500 for the remainder…

Source: Bangkok Post – 29 March 2016

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