Thai commercial banks cut lending rate to support firms

Thailand’s Kasikornbank (KBank) and Siam Commercial Bank (SCB) cut their prime lending rates by 40 basis points on April 9 after the Bank of Thailand (BoT) lowered the required contribution by banks to the Financial Institutions Development Fund (FIDF).

10, Apr. 2020

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BANGKOK, VNA - Thailand’s Kasikornbank (KBank) and Siam Commercial Bank (SCB) cut their prime lending rates by 40 basis points on April 9 after the Bank of Thailand (BoT) lowered the required contribution by banks to the Financial Institutions Development Fund (FIDF).

The banks' new prime lending rates will take effect on April 10.

KBank's minimum lending rate (MLR) will be reduced to 5.60 percent from 6 percent, the minimum overdraft rate (MOR) to 6.22 percent from 6.62 percent and the minimum retail rate (MRR) to 6.10 percent from 6.50 percent, KBank Co-President Predee Daochai said in a release.

The bank's deposits rates will remain unchanged, he said.

At the same time, SCB's new MLR will be reduced to 5.375 percent from 5.775 percent, MOR to 6.095 percent from 6.495 percent and MRR to 6.345 percent from 6.745 percent, said Chief Executive Arthid Nanthawitthaya.

The latest rate reduction is aiming at alleviating the financial burden of the bank's retail and corporate customers amid the economic downturn stemming from the COVID-19 pandemic.

The BoT previously said the rate that financial institutions must contribute to the FIDF would be halved, from 0.46 percent of deposit base to 0.23 percent, for two years to encourage financial institutions to immediately pass on cost savings by reducing their lending rates. - VNA