GH Bank, GSB play Santa to borrowers

While the government is offering tax breaks for year-end shopping to individual taxpayers and one-off cash handouts to those earnings up to 100,000 baht a year, it is time for state-owned banks to play Santa Claus to their borrowers.

GH Bank and the Government Savings Bank (GSB) plan to give cashback awards to existing debtors with good repayment records.

The state-run banks have proposed the cashback programme to their borrowers as festive gifts, said Finance Minister Apisak Tantivorawong. The measures will seek cabinet approval in coming weeks to encourage borrowers to service their debts on time, he said.

GH Bank will give cashback of 5% of the interest paid this year for those with a good credit history for three consecutive years, 4% for two years in a row and 3% for one year of on-time payments, said an informed source at the bank who requested anonymity.

The average cashback amount would be 1,000 baht per person from the scheme, based on mortgages worth up to 1 million baht, the source said.

The bank expects to spend 3 billion baht on the scheme with around 3.5 million borrowers getting cash back, said the source.

As the country's economic momentum is losing steam from flagging domestic consumption, tepid exports and private investment, soft crop prices and the effects from the government's crackdown on zero-dollar tour operators, which could shave off 700,000 foreign tourists this year from total arrivals, the government has adopted cash handouts to low-income earners and taxpayers to raise domestic spending.

Under the one-time cash giveaway scheme, those earning up to 30,000 baht a year are entitled to 3,000 baht per person, while those earning more than 30,000 but less than 100,000 a year are entitled to 1,500 baht.

For the shopping tax deduction, each individual taxpayer is able to deduct the value of domestic purchases of goods and services during Dec 15-31 from personal income taxes.

Another source at the GSB said the bank will offer a cashback scheme of 1-3% of interest paid this year.

The GSB forecast it will spend 150-160 million baht for the cashback scheme, with 700,000-800,000 borrowers gaining from it.

Bangkok Post News