Banking on change: Thai banks raise policy rates to woo depositors with digital deals

Following the Bank of Thailand‘s decision to hike its policy rate by 0.25 percentage points, banks are now increasing both their loan and deposit rates. In a bid to attract depositors, special rates are being offered on digital savings products.

Siam Commercial Bank (SCB), the country’s fourth-largest lender by total assets, has acted promptly to the central bank’s policy rate rise by lifting its prime loan rate by 0.25 percentage points. The change is effective from today.

All types of loan rates have also been increased, including the minimum retail rate (MRR) which now stands at 7.3% annually, the minimum loan rate (MLR) at 7.05% annually, and the minimum overdraft rate (MOR) at 7.575%.

According to SCB’s Chief Executive Kris Chantanotoke, these increased loan rates are indicative of higher financial costs and are consistent with the rising rates across the industry. SCB has also increased deposit rates by a maximum of 0.3%.

The bank’s business strategy, titled “digital bank with a human touch,” has led to a 0.1-0.3% hike in digital saving rates to attract depositors.

Last Wednesday, the Bank of Thailand’s Monetary Policy Committee (MPC) increased its benchmark interest rate by 0.25 percentage points to 2.5%, the most substantial level in ten years. However, economists predict this to be the conclusion of the rate hike cycle, as the MPC plans to maintain the policy rate at the existing level for a considerable duration.

Digital saving rate

TMBThanachart Bank (TTB) has responded by raising its MLR, MOR, and MRR by 0.25 percentage points each. Specific deposit accounts have seen an increase in the deposit rate, and the digital saving rate has been lifted to its peak at 2.2% per annum.

Piti Tantakasem, Chief Executive of TTB, stated that the bank’s interest rate movement aligns with the central bank’s policy rate hike. The bank is committed to supporting the central bank’s monetary policy direction in ensuring sustainable economic growth, medium-term price stability, and financial stability.

Simultaneously, Bangkok Bank (BBL), the largest lender in the country by total assets, echoed the policy rate movement by increasing both deposit and loan rates.

All types of loan rates have been increased by 0.25 percentage points per year. This includes MRR at 7.30%, MLR at 7.10%, and MOR at 7.55%. Deposit rates have also been lifted by 0.10-0.25%, including savings deposits at 0.55% and e-savings deposits ranging between 0.65-1.5%.

In related developments, Kasikornbank (KBank) announced the appointment of Rungruang Sukkirdkijpiboon as President and Executive Director, effective from October 11.

Rungruang is one of KBank’s co-presidents, along with Pipit Aneaknithi, Pipatpong Poshyanonda, and Chongrak Rattanapian, who was promoted on Aug 1 from his previous role of Chief Financial Officer, Bangkok Post reported.