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​ 

July 25, 2022
Vietnam’s current Law on E-Transactions was passed in 2005 and has been effective since March 1, 2006. This law is considered a framework law, developed based on the Model Law on E-Commerce of the United Nations Commission on International Trade Law (UNCITRAL). According to the Ministry of Information and Communications (MIC), over the past 17 years, the implementation and application of e-transactions has shown significant evolution in certain areas demanding high levels of international integration, such as banking and e-commerce, but has faced difficulties in other areas due to a lack of detailed guidance. In addition, with the strong growth and breakthrough development of digital technologies such as artificial intelligence, big data, biometrics, and blockchain, and in the context of the ongoing Industrial Revolution 4.0 and the development of digital government, digital economy, and digital society, the 2005 Law on E-Transactions has revealed its shortcomings. Therefore, the government of Vietnam has entrusted the MIC to take the lead in drafting a new Law on E-Transactions, which will replace the old 2005 law in order to meet the country’s development needs. Accordingly, the MIC published a Draft Law on E-Transactions (“Draft Law”) for public consultation from May 4 to July 4, 2022. The latest accessible version of the Draft Law at the time of writing is Version 4. The effective date of the Draft Law is still not yet determined, though this law is expected to be submitted to the National Assembly for its review and comments in October 2022 and approval in May 2023. The following are some key contents of the Draft Law: 1. Scope of Application Unlike the current law, which explicitly excludes certain areas such as the issuance of certificates of land use rights and marriage certificates from the scope of application, the Draft Law attempts
Read More
July 19, 2022
On June 23, 2022, Thailand’s Securities and Exchange Commission (SEC) opened a public hearing period on regulatory controls for initial coin offering (ICO) portals that serve as financial advisors to digital token issuers. The proposed measures aim to prevent conflicts of interest; allow ICO portals to outsource certain functions; and establish additional notification obligations for ICO portals. The public hearing is open for general comments until July 23, 2022, and the new legislation is expected to be issued soon after that. During the public hearing period, any interested parties can comment on the SEC’s proposed principles. The key proposed points are outlined below. Conflicts of Interest Similar to SEC-approved financial advisors for securities offerings, ICO portals must be clear of conflicts of interest when representing issuers in a coin offering. According to the draft regulation, the following conflicts of interest are prohibited: The ICO portal (and certain individuals as specified by the SEC) directly or indirectly holds a prohibited amount of shares in the issuer, its affiliates, or its subsidiaries. If the issuer is not a listed company, any shareholding or portion thereof is prohibited. If the issuer is a listed company on the Stock Exchange of Thailand (SET), the shares held by the ICO platform may not total more than five percent of the total voting rights. The issuer (and certain individuals as specified by the SEC) directly or indirectly holds shares in the ICO portal in any amount if the ICO portal is not a listed company, or totaling more than five percent of the voting rights if the ICO portal is listed on the SET. Any of the ICO portal’s directors or executives, or the head of the department responsible for screening the ICO project, is also a director in the issuer. The ICO portal has
Read More
June 30, 2022
On May 30, 2022, Thailand’s Securities and Exchange Commission (SEC) announced that it would start regulating ready-to-use utility tokens, a type of digital token that had previously been exempted from the SEC’s approval and regulatory control. A public forum was open for comments from various stakeholders until June 29, 2022, and the draft regulation is expected to be issued soon. So far, the SEC has only supervised the issuance of not-ready-to-use utility tokens—digital tokens with the underlying right to acquire specific goods or services, which cannot be utilized upon issuance but at a later date. Due to the growing digital asset industry and lack of regulatory control, ready-to-use utility tokens have become more popular and many are listed for trading in digital asset exchanges. The SEC claimed that it is now necessary to regulate ready-to-use utility tokens as some issuers appeared to be exploiting the regulatory loophole to manipulate the price and supply of these tokens in both the primary and secondary markets, while providing insufficient data disclosure to investors. The SEC’s proposed principles include the following key points: Pre-Approval Requirements The same pre-approval requirement applicable to not-ready-to-use utility tokens will apply to ready-to-use utility tokens which an issuer intends to list on a digital asset exchange. This means that the issuer must proceed with the standard formalities, i.e., obtaining prior approval from the SEC, filing a draft prospectus, and offering the approved tokens via a SEC-approved ICO portal operator only. The SEC offers a fast-track (15 days) approval for qualifying ready-to-use utility tokens, which are those with plain-vanilla characteristics; with an offering price corresponding to the value of the underlying goods/services; for which the supply of goods and services does not vary with the price of the tokens (i.e., fixed coins); and which are not intended to be
Read More
February 21, 2022
On February 14, 2022, Thailand’s Securities and Exchange Commission (SEC) announced a public hearing period on proposed advertising regulations for digital asset businesses. The public hearing period is now open for general comments until March 15, 2022. In the announcement, the SEC expressed their intention to provide clear digital asset advertising principles that conform to regulations in other countries, such as Singapore, the UK, and Japan. The SEC, in a meeting on February 3, agreed that the principles to be developed should apply to all digital asset businesses operating in Thailand. During the public hearing period, any interested parties may comment on the SEC’s proposed principles, which include the following key points: Advertisements that educate, inform, or give facts about digital assets, investments or services, or that provide an overall picture of digital assets, must not exaggerate, distort, or conceal information, or otherwise mislead consumers. In addition, advertisements that refer to customer numbers must only indicate the number of customers who have received approval to open an account and who are ready to use the service. Advertisements must be clear and appropriate, provide a warning on investment risks, and include clear and noticeable SEC-mandated statements in the font size stipulated by the SEC. Advertisements that present positive information or suggest an opportunity to receive returns must provide a balanced view that also discloses negative information or states investment risks. Advertisements relating to cryptocurrencies can only be made via a business operator’s official channels (e.g., the operator’s website, app, or other official online channel), and cryptocurrency cannot be advertised in public areas (e.g., billboards, public transportation, websites, newspapers and periodicals, etc.). However, advertisements for the services of a digital assets business can still be made in public areas and other channels. For example, this can be understood as meaning that
Read More