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Bank-of-Thailand (BOT) Notices on Rules, Procedures and Conditions for the Retail Lending Business of Financial Institutions (Sor Nor Sor 14/2560) and Non-Financial Institutions (Sor Nor Sor 15/2560) were issued in the Government Gazette at the beginning of this calendar calendar month and will be applicable from 1 September 2017. New legislation will remove two recent communications (Sor Nor Sor 1/2560 and Sor Nor Sor 2/2560) and contain supplementary clauses primarily aiming at consumer protection and the provision of a credit facility for emergencies, taking into account important consideration below.
Existing legislation provided that the limits of loans available to banks and private banks (collectively known as ''operators'') should not be more than five fold the applicants mean annual salary. The new Communication, however, sets a new ceiling on lending as follows: In the case of a borrower with an annual mean salary of less than THB 30,000: (a) the upper limits may not be more than 1.5 fold of the borrower's annual salary; and (b) no personal borrower may continue to be eligible if the borrower has already been provided with personal loans by three providers.
If necessary, the merchant may raise the temporary maximum to up to five fold the borrower's per month salary, provided this meets the reporting requirement. A borrower with an annual median of THB 30,000 or more may not have a maximum exposure of five months of annual earnings.
Additionally indicated real costs can still be invoiced to the customer. The operating costs of the provider to be paid by the customer must, however, be appropriate and must not contain general business-as-usual (BAU) expenditure such as automatic payment collections, utilities or staff remuneration. It is not permissible for providers to intentionally grant a personal consumer credit without the request or request of the customer.
Information on interest rate, fine, service charges and charges must be provided to users and this information must be included in all operators' promotional material, claim documents and credit contracts. Operators must keep information about users in confidence. Publication of information to users is subject to the latter's express agreement in writing, unless the publication is covered by the exemptions provided for in the notice, e.g. for compliance with the Act or for the purposes of an inquiry or legal proceedings.
In addressing new potential customers, the provider must allow them to reject any further contacts of the provider in relation to the offer of personal credit.