* Limits line of credit limits for credit cards, personal loans

* Reduces the maximum credit card interest rate to 18 pct from 20 pct

* High household debt “may affect the economy” – deputy governor of the bank (adds details, quotes)

BANGKOK, July 26 (Reuters) – Thailand’s central bank on Wednesday tightened controls on credit cards and unsecured personal loans, a move that is expected to contain high household debt levels and could reduce domestic consumption.

The measures, which entered into force on September 1, come at a time of concern about overspending by citizens and rising bad debts.

The rule changes mean that credit card holders can no longer automatically get credit limits of five times their monthly income. As of September 1, only people earning at least 50,000 baht ($ 1,492) per month can get a maximum spending limit of five times their monthly salary for credit cards.

At the end of March, Thai household debt represented 78.6% of gross domestic product, among the highest in Asia, although it fell slightly from 79.8% at the end of 2016.

“Thai household debt is high and could affect households and the economy in the long run,” Bank of Thailand deputy governor Ruchukorn Siriyodhin said at a press conference.

High levels of debt have already had an economic impact. This is one of the reasons the central bank has not cut its benchmark interest rate for more than two years in an attempt to slow Thailand’s slow growth rate, as such a move could increase the household debt level.

Credit card loans that turned into bad credits accounted for 3.8% of all such loans at the end of March, while those for personal loans were 2.9%.


On Wednesday, Fitch Ratings said Thai banks continued to face pressure on asset quality resulting from vulnerabilities in small and medium-sized businesses and the unsecured personal lending sectors.

Currently 6.7 million people hold 19.8 million credit cards, Ruchukorn said.

The new rules reduced the maximum credit card interest rate from 20% to 18%, she said.

New credit card applicants with a monthly salary of less than 30,000 baht can have a line of credit up to 1.5 times their income, and those with an income less than 50,000 baht will get up to three times.

The line of credit for new unsecured personal loan applicants with monthly income of less than 30,000 baht will be limited to 1.5 times their income, and they will be limited to three accounts.

Shares of market leader Krungthai Card, Thailand’s largest credit card issuer and a unit of Krung Thai Bank fell 5% on credit card changes. The banking index was down 0.11%.

Thais began to accumulate debt from a young age, over a longer period and in a larger amount, BOT Governor Veerathai Santiprabhob said last month, adding that the high levels of debt were a problem. challenge for households and policy makers. ($ 1 = 33.51 baht)

Additional reports by Chayut Setboonsarng; Editing by Richard Borsuk

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