TDRI criticizes high interest rates in Thai banks, hindering competition. Government should use state banks to increase competition by offering higher deposit rates and lower loan rates.
Introduction
The Thailand Development Research Institute (TDRI) has raised concerns about the high interest rates for deposits and loans in Thai commercial banks. Experts criticize the excessively high interest rates, which hinder competition in the financial market.
Key Takeaways
The interest rates for deposits and loans in Thai commercial banks are excessively high compared to many other countries, hindering competition in the financial market. While Thai banks offer low deposit rates, their loan rates are among the highest, indicating a lack of competition among commercial banks. To address this issue, academics suggest that the government should use state-owned banks to increase competition in the financial market.
Government’s role
The government is urged to tackle this issue by taking advantage of state-owned banks to foster competition. Notably, state-owned banks could offer higher deposit interest rates and lower loan interest rates to encourage competition and provide better options for savers. This move could also help balance the growth of bank profits with the overall economy’s modest growth.
Source : Calls for more Competition in Thailand’s Banking Sector