Finance Ministry to fast-track NPL debtor blocklist removal

The Finance Ministry is set to engage in discussions with the Bank of Thailand and the National Credit Bureau (NCB) to address the issue of non-performing loans (NPLs) caused by the Covid-19 pandemic, specifically targeting Code 21 debtors. The aim is to expedite the removal of these debtors from the bureau’s blocklist, enabling quicker access to credit.

Deputy Finance Minister Julapun Amornvivat highlighted that approximately four million small and medium-sized enterprise accounts are currently classified as NPLs under the Code 21 category by the central bank.

“According to the NCB’s conditions, these debtors will be removed from its records next year. However, the government wants to expedite this process to enable these debtors to access credit more quickly.”

Under the current NCB conditions, debtors who become NPLs or have overdue debt for three months or more without rectification remain on the blocklist for five years. Once removed from the blocklist, their information is still retained in the NCB’s records for an additional three years, resulting in a total period of eight years.

Julapun argued that the eight-year period for NPL debtors to remain in the NCB’s records is excessively long. He emphasized that the state’s intervention to assist Code 21 NPL debtors should not be perceived as undermining financial discipline, considering these debtors were adversely affected by the pandemic.

Previously, NCB officials noted that even if Code 21 debtors were removed from the records, obtaining credit from financial institutions would still be challenging due to stringent lending rules.

In other news, Julapun mentioned the possibility of reviving the long-term equity fund, a mutual fund that offers tax deductions for investments in equities. This proposal is currently under consideration by the Finance Ministry, particularly concerning the investment units’ holding period.

Julapun also addressed the volatility of the Stock Exchange of Thailand, asserting that the decline is not related to fundamental issues. He maintained that the country still possesses potential for growth.

He added that part of the volatility stems from domestic political issues, but I believe this instability is likely to be temporary.

These developments highlight the government’s proactive stance in mitigating the financial fallout from the pandemic and fostering economic recovery, reported Bangkok Post.