BANGKOK, 27 April 2012 -The Bank for Agriculture and Agricultural Cooperatives Committee is proposing a recapitalisation plan of 10 billion baht within 3 years to the Ministry of Finance to enable it to launch a debt moratorium program for farmers and low-income earners, with minimal effects on its capital.
BAAC Manager Mr. Luck Vajananavat insisted that a debt moratorium for good clients with remaining debt of no more than 500,000 baht would not encourage them to discard their financial disciplinary, due to the stringent loan conditions.
He added that the move will encourage NPL debtors to straighten up their financial profiles to be able to join in the program. The BAAC reportedly has more than 2.9 million debtors with accumulated debts of nearly 400 billion baht, who are eligible for this program. However, their participation could cost the BAAC six billion baht a year. It is for this reason the BAAC has resolved to propose to the Finance Ministry the recapitalization to keep the proportion of its capital to not lower than 10% of its risk assets.
(NNT : Nuttaporn Chanchokpong)