Surapol attributed the 14.6% rise in NPLs from credit cards to the increase of minimum monthly payments from 5% to 8% of the amount owed on January 1.

The Bank of Thailand imposed the 8% rate for one year, and the minimum payment rate will be increased to 10% on January 1, 2025.

The instalment amount had been reduced to 5% during the Covid crisis to help lower people’s financial burden. The central bank is paving the way for 10% minimum repayment, which prevailed before the pandemic.

The NCB advised the central bank to come up with measures to decelerate the growth of NPLs, especially among credit-card users, who are estimated to default even more once the 10% minimum payment rate kicks in.

“Currently about 1 million credit cards and 5 million accounts of personal loans have become NPLs, signifying an increasingly serious problem,” Surapol said. “Default rates have been rising among earners of less than 30,000 baht per month. If this trend keeps up, there will be more legal problems related to consumers in the near future.”

The NCB also reported that in the first quarter of this year there were 458,005 civil cases and some 184,000 criminal cases filed against borrowers. Most of these cases are related to general borrowing (about 52,000), credit cards (44,000), personal loans (42,000), auto loans (29,000), and guarantors (11,000).