State banks offer New Year treats

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC), Government Savings Bank and GH Bank plan a string of promotional campaigns, including cashback from interest expenses, as New Year gifts to customers.

The cashback on interest expenses for the bank’s 2.2 million debtors with good-payment track records and debts of up to 250,000 baht will go before the BAAC’s board meeting on Dec 20, said senior executive vice-president Somsak Kangteerawat.

Those who make timely payments from Jan 1 to Dec 31, 2018 will receive a 30% discount on annual interest expenses, representing 2-3 percentage points, Mr Somsak said.

The state-backed farm bank charges borrowers the minimum retail rate (MRR), which now stands at 7% per year.

For instance, the bank’s borrowers who owe 250,000 baht can save 5,000 baht a year if the interest rate is slashed by 2 percentage points. Based on the BAAC’s MRR, borrowers with debt of 250,000 baht are liable to pay 17,500 baht a year in interest.

He said that the cashback will cost the bank around 4 billion baht.

The saved interest will be used to lower borrowers’ outstanding debt.

Apart from the cashback on interest expenses, the bank plans to offer special interest rates for several loan packages worth 100 billion baht for the New Year.

GSB president and chief executive Chatchai Payuhanaveechai said the bank will offer a similar cashback on interest expenses to its 200,000 borrowers with debts not exceeding 300,000 baht.

The bank will give a 30% cashback on interest expenses, which will be transferred to qualified borrowers’ deposits accounts by the middle of January, he said.

For instance, those having debts of 300,000 baht will save 9,000 baht a year if they are charged at 10% per annum.

Among the New Year gifts, the bank will offer special deposit rates to encourage people to save and create good financial records for future borrowing, he said.

The bank offer deposit rates 2-3 times higher than normal deposits rate for those who save 100-1,000 baht a month at the GSB for five years.