Thai state banks raise interest rates after central bank policy hike
Following the Bank of Thailand‘s recent policy rate increase, state banks, including the Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives (BAAC), have raised interest rates for loans and deposits, with deposit rates exceeding loan rates.
Vitai Ratanakorn, GSB’s president and chief executive, stated that after the central bank’s policy rate increased by a quarter percentage point from 1.75% to 2% on May 31, GSB raised fixed deposit rates to a maximum of 0.35% per year. The bank has also introduced high-yield deposit campaigns, such as unique deposit products and savings lotteries, which boost both interest and prizes.
GSB increased all loan rates by 0.25% per year on a gradual basis, starting June 8, to guarantee equal access to financial services, particularly for retail customers and vulnerable groups. Ratanakorn also highlighted that the bank’s minimum retail rate (MRR) is lower than the average rate offered by large commercial banks.
Chatchai Sirilai, BAAC’s managing director, said the bank raised deposit interest rates by 0.05-0.50% per year to encourage savings and increase returns, making them more competitive with the yields of commercial banks and specialised financial institutions. In addition, all types of loan rates increased by 0.10-0.25% per year. The MRR rose from 6.88% to 6.98% per year, the minimum loan rate increased from 5.38% to 5.63% per year, and the minimum overdraft rate climbed from 6.75% to 6.88% per year.
These changes took effect on June 6. BAAC has also implemented relief measures to support farmers and individuals to alleviate the pandemic’s impact during the ongoing economic recovery. These measures include debt restructuring, career building, a debt moratorium for both principal and interest and debt management consultancy, reported Bangkok Post.
Due to inflation concerns, interest rate hikes of the Bank of Thailand are anticipated by Siam Commercial Bank’s research unit, SCB Economic Intelligence Center (EIC). The predictions are that the Central Bank will increase its policy benchmark rate from the current 2% to 2.5% in both August and September. For more information, click the HERE to read more.