Cabinet Cuts Fund Contributions For Four State Banks
Thailand's Cabinet cut fund contribution rates for four state banks from 0.25% to 0.0625% annually starting January 2025, aiming to reduce their costs and enable greater lending support to struggling borrowers and small businesses facing ec
The Cabinet has approved a Finance Ministry announcement to reduce fund contribution rates for four specialized financial institutions: the Bank for Agriculture and Agricultural Cooperatives (BAAC), Government Savings Bank, Bank for Housing and Urban Development (BHUD), and Islamic Bank of Thailand for the 2025 fiscal year.
The contribution rate will be reduced from the previous 0.25% annually to 0.0625% annually on deposits received from the public, effective from January 1 to December 31, 2025, with contributions divided into two installments of 0.03125% each. This reduction is intended to lower the cost burden on specialized financial institutions and enable them to provide meaningful assistance to borrowers.
Government spokesman Lalida Persivivatana stated that this measure aligns with Thailand's volatile economic conditions, which face challenges from global trade policies, geopolitical tensions, natural disasters, and Middle Eastern conflicts. Many borrowers at these institutions are grassroots individuals, vulnerable groups, small business owners, and microenterprises facing liquidity risks and debt repayment challenges.
The government expects these financial institutions to use the reduced costs to support debtor assistance programs, debt restructuring, and new credit facilities for small and medium enterprises (SMEs) with potential, thereby improving economic liquidity. The government will closely monitor implementation to ensure aid reaches people effectively without undermining financial discipline or encouraging unnecessary debt default.
"The government is leveraging specialized financial institutions as tools to support grassroots communities, reduce financial burdens, help borrowers stabilize and recover, and support credit for entrepreneurs with potential, enabling the economy to move forward with stability and fairness," Lalida stated.
