Four banks cut overdraft and retail rates
The four largest commercial banks cut their minimum retail rates and minimum overdraft rates from Thursday. (Photo from Bangkok post)
The four largest commercial banks passed on the central bank’s 25 basis point cut in the policy rate almost entirely, reducing their minimum retail rate (MRR) and minimum overdraft rate (MOR) from Thursday.
Kasikornbank (KBank), Krungthai Bank (KTB) and Bangkok Bank (BBL) reduced their MOR and MRR by 25 basis points, while Siam Commercial Bank (SCB) lowered its MRR by 25 basis points but reduced its MOR by 12.5 basis points lower.
The minimum bank borrowing rate (MLR), however, remains unchanged.
KBank and KTB’s new MRRs and MORs are at the same rate of 6.87% after the rates were reduced by 7.12%. The new MOR for SCB, the country’s largest lender by assets, is lowest among industry peers at 6.745%, but the new MRR of 7.12% is higher than in other major banks.
For BBL, the new MORs and MLRs will be billed at the single rate of 6.875%, compared to 7.125% before the tariff cuts.
KBank, the country’s second-largest lender by assets, spearheaded lending rate cuts yesterday, followed by KTB, BBL and SCB.
“The bank is ready to pass on the cut in key rates by reducing the MOR and the MRR by 0.25 percentage points to help small and medium-sized enterprises (SMEs) and ease the burden on retail borrowers, because these are the rates. loan for almost all of the loans to these customer groups, ”said KBank co-chair Predee Daochai.
Last week, the Bank of Thailand’s rate-setting panel unexpectedly lowered the benchmark rate to 1.50%, from 1.75% to support the country’s sluggish economic growth.
In addition to stimulating the economy, lowering the benchmark rate could reduce the interest of the baht to attract offshore funds, given the declining yield.
KTB chairman Payong Srivanich said his majority state-owned bank understands SMEs are jostling amid foreign currency volatility and the US-China trade dispute.
The bank’s rate cuts were also in response to the central bank’s policy rate cut, he said.
Lower MOR and MRR will ease the burden on SMEs and retail borrowers and enable them to turn the tide, Payong said.
BBL executive vice president Suvarn Thansathit said the bank’s rate cuts are aimed at helping business operators, especially SMEs, lower their interest charges.
Meanwhile, SCB chief executive Arthid Nanthawithaya said his bank’s rate cuts would support a Thai economy hit by the trade war.
Specialized financial institutions will soon hold a meeting to discuss the possibility of lowering interest rates.
GH Bank, the state-owned mortgage lender, is expected to jump on the rate-cutting bandwagon.