You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

February 24, 2025

Bank of Thailand Implements New Responsible Lending Regulations

Subscribe to Updates

On January 31, 2025, the Bank of Thailand (BOT) announced a new Notification re: Responsible Lending, replacing a similar notification from 2023. This new notification provides updated measures to assist debtors in different circumstances and clear implementation guidelines for lenders, with the aim of resolving household debt issues.

Scope

The service providers covered by the notification include banks and nonbanks (e.g., credit card companies, asset management companies, licensed personal loan providers, and nano finance operators) that conduct lending business.

New Requirements

The notification’s core focus remains loan management throughout the lifecycle of a loan—from credit product development to legal proceedings and debt transfers to other creditors—but with further clarification and detail compared to the 2023 notification. The key revisions in the new notification are summarized below.

  • Advertising standards: The notification tightens requirements in some areas and relaxes them in others.
    • Stricter requirements: It is now clearly stipulated that the BOT oversees taglines that may encourage excessive borrowing. More examples of noncompliant statements are also added (e.g., “Elevate your lifestyle now, pay later”; “Get approved, even with credit challenges”). In addition, advertising material that contains multiple credit products should provide clear minimum and maximum interest rates, especially when there are significant differences in the interest rates of each product.
    • Relaxed requirements: The required information for some marketing activities is now reduced. For example, in marketing events with staff promoting loan products and offering free giveaways, service providers have the discretion to provide effective interest rate information in the manner they deem appropriate, and the advertisement material can display only the mandatory warning statements without providing interest rate details.
  • Encouraging customer financial discipline: The notification requires service providers to implement more elaborate and extensive tools to influence customer behavior (termed “nudging” by the BOT) at every stage of the lending cycle. This includes (1) increasing the nudging activities before loan application and during the repayment period to encourage customers to choose the appropriate loan repayment plan and a shorter lending period and to pay more than the minimum required payment per period, and (2) amending standard messages on persistent debt and debt restructuring measures to be easier to understand, mentioning conditions and the benefits of debt restructuring, and providing contact information.
  • Affordability assessments: The notification provides additional exemptions to the general affordability assessment criteria for (1) debt consolidation, refinancing, and additional loans under existing credit lines, whereby the existing or alternative repayment capability data of the customers (e.g., repayment history) can be used for the affordability assessment, and (2) debt with a family member as guarantor, whereby aggregate income of family members will be used for the affordability assessment.
  • Default management: The definition of “persistent debtors” (PDs)—which refers to personal loan debtors under the BOT’s supervision scheme, excluding title loans and digital payment loans—now includes those with over 90 days or three months of nonrepayment whose loans have minimum installment payment conditions, instead of non-NPL (nonperforming loan) debtors as stipulated in the 2023 notification. PDs will benefit from an extended repayment period of up to seven years for severe PD cases, without suspension of revolving credit. For debt restructuring, service providers must assist debtors at the account level rather than based on overall repayment ability. In this regard, the criteria for preemptive or troubled debt restructuring offerings have been amended to be better for debtors. Service providers must offer a preemptive debt restructuring option to debtors whose lapsed repayment is 90 days past due or less when signs of repayment difficulty appear, and a troubled debt restructuring option to debtors whose lapsed repayment is over 90 days past due, regardless of NPL status. Debt transfer, contract termination, and legal proceedings can only occur after offering the troubled debt restructuring option at least once.
Related Professionals

Industries

Fintech

Practices

Banking and Finance

Location

RELATED INSIGHTS​ 

June 13, 2024
The Bank of Thailand (BOT) has announced its new Enhanced Regulatory Sandbox, which provides an opportunity to experiment with currently restricted financial innovations under a controlled environment. The BOT is employing a thematic approach to determine the scope of technology or innovations that may participate in the Enhanced Regulatory Sandbox and will only accept applications in each theme for a limited period. The first announced theme is “programmable payments,” which refers to payment and payment-related transactions with automatic execution upon the fulfillment of a predefined condition utilizing distributed ledger technology (DLT) and a smart contract or comparable technology in which electronic data units are issued on an electronic system or network. The application period for programmable payment testing in the Enhanced Regulatory Sandbox runs from June 13 to September 13, 2024. A summary of the programmable payment testing framework under the Enhanced Regulatory Sandbox is provided below. Scope The Enhanced Regulatory Sandbox accepts applications for the following programmable payment activities: Automated payment and settlement upon fulfillment of predefined conditions. Escrow services with predefined delivery or transactional conditions. Asset tokenization through issuance of digital tokens representing rights in an asset, with payment for tokens or payment of benefits or returns to holders of digital tokens occurring automatically when conditions are met. Other testing related to the items mentioned above. Requirements and Conditions Programmable payment testing activities in the Enhanced Regulatory Sandbox must comply with the following requirements and conditions: Electronic data units issued for programmable payment testing must be pegged to the Thai baht (THB) on a one-for-one basis (i.e., 1 unit = THB 1), with the float account storing THB equal to the value of the electronic data units issued. Participants must define the redemption rights of the unitholders and proceed with the THB redemption according to the participants’
Read More
June 3, 2024
On May 24, 2024, the Central Bank of Myanmar (“CBM”) issued a public notice warning individuals against participating in the sale, purchase, exchange, or transfer of unregulated digital currencies, as well as unauthorized money transfers. The CBM has indicated its readiness to enforce regulations by closing bank accounts and pursuing legal action, which may result in imprisonment, fines, or both, in accordance with the Central Bank of Myanmar Law, the Anti-Money Laundering Law and the Financial Institutions Law. The CBM is the sole legal entity authorized to issue currency in Myanmar, as stipulated in the Central Bank of Myanmar Law. The CBM does not recognize digital currencies as official currency, nor has it granted permission to financial institutions within Myanmar to trade them. The existing legal framework, comprising the Foreign Exchange Management Law and the Financial Institutions Law, further cements the illegality of cryptocurrency transactions within the nation’s borders. Four years ago, in May 2020, the CBM issued Notification No. 9/2020, prohibiting all persons residing in Myanmar from engaging in the sale, purchase, or exchange of unregulated digital currencies. The list of prohibited currencies includes widely recognized cryptocurrencies such as Bitcoin (BTC), Litecoin (LTD), Ethereum (ETH), and Perfect Money (PM), with a particular emphasis on transactions conducted through personal Facebook accounts and web pages. Before the issuance of the 2020 notification, the CBM had announced that anyone engaging in digital currency transactions did so at their own risk, but no enforcement measures were being taken at the time. However, after the 2020 notification was issued, the CBM has pursued legal action against persons involved in illegal currency conversion and unauthorized hundi money transfers using Tether (USDT). These enforcement measures have included shutting down bank accounts and initiating legal proceedings under the Anti-Money Laundering Law and the Financial Institutions Law.
Read More
May 9, 2024
As non-cash payments continue to surge in Vietnam, the requirement for strong security standards and a clear legislative framework for intermediary payment services (“IPS”) is becoming more and more critical. Recognizing this, the State Bank of Vietnam (“SBV”) has been working on a draft decree to supersede the outdated Decree No. 101/2012/ND-CP dated November 22, 2012, on non-cash payments (“Draft Non-Cash Payment Decree”), which will lay the groundwork for non-cash payments in general and the provision of IPS in particular. Building upon this, the SBV recently issued a draft circular to replace Circular No. 39/2014/TT-NHNN dated December 11, 2014, on IPS (“Circular 39”) (“Draft IPS Circular”), which will offer more detailed guidance on the provision of IPS in Vietnam on top of the Draft Non-Cash Payment Decree. The Draft IPS Circular will be applicable to (i) IPS providers; (ii) foreign organizations providing IPS in Vietnam; and (iii) organizations and individuals involved in the provision of IPS. Some key updates regarding the Draft IPS Circular are as follows: Scope of Application The Draft IPS Circular sets out further guidance for the provision of IPS as listed under the Draft Non-Cash Payment Decree, including: (i) electronic clearing services; (ii) electronic wallet (“e-wallet”) services; (iii) collection and payment support services; (iv) financial switching services; (v) international financial switching services; and (vi) electronic payment gateway services. Notably, the Draft IPS Circular has explicitly excluded from its scope of application the provision of accounts by goods/service providers to their customers solely for the purpose of payment within the systems of such providers (e.g., cards/coupons or service/transaction accounts of online game service providers, transportation service providers, or securities companies, etc.). Requirements on the Provision of IPS Electronic Clearing Services: The Draft IPS Circular introduces regulations to cover certain elements of electronic clearing services that have
Read More
April 30, 2024
On March 25, 2024, Thailand’s Securities and Exchange Commission (SEC) published an amendment to its Notification re: Public Digital Token Offering to strengthen governance for initial coin offerings (ICOs). The amendments took effect on April 16, 2024, and reflect the SEC’s commitment to creating a safer and more transparent ICO environment, enhancing investor protection, and building confidence in ICOs as a fundraising tool. The key changes are outlined below: New Checks and Balances Requirements The new regulations require digital token issuers to implement checks and balances to protect investor rights—including an annual audit requirement and measures to prevent and manage conflicts of interest. These measures must be clearly disclosed in the ICO filing documents. In addition, certain project-related decisions must be approved by the issuer’s board of directors, which is also responsible for the accountability of such decisions. Improved Rules Concerning Voting Rights The SEC has introduced rules concerning voting rights and procedures for digital token holders, particularly for token types that previously lacked regulatory clarity. These rules specify the procedures for soliciting votes, the rationale behind vote requests, and the criteria for determining voting outcomes. The new rules, however, do not apply to real estate-backed tokens or infrastructure-backed tokens. Enhanced Advertising Regulations The SEC has revised advertising guidelines to ensure that investors receive essential information. The updated rules now require all ICO advertising to be fair and informative and to avoid misleading content. Advertisements must include appropriate risk warnings and a credible source for any claims made. The notification also stresses that it is the responsibility of digital token issuers to strictly supervise and ensure that those who create advertisements with or for an issuer comply with all relevant advertising regulations, including the following: Warning of investment risk: Advertisements must include warnings about investment risks and contact information
Read More