BANGKOK — The Bank of Thailand is set to introduce standardised banking fees across the financial sector starting in July, a move aimed at reducing the financial burden on individuals and small and medium-sized enterprises by capping and simplifying charges for key retail and business banking services.

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Central bank governor Vitai Ratanakorn announced that a month-long public consultation period on the standardisation of banking fees is scheduled to end on May 10, after which an official announcement will follow. “The rollout could begin as early as July, or be implemented gradually on a case-by-case basis, which would help ease the burden on retail customers and SMEs,” Mr. Vitai said on Friday.

The move to standardise and reduce 10 to 15 key retail and SME banking fees reflects the lower operating costs banks now enjoy in the digital era, the central bank has said. As more customers shift to online and mobile banking, the cost of maintaining physical branches and processing paper transactions has fallen — and the central bank believes those savings should be passed on to customers.

Key proposals include lowering credit card cash withdrawal fees to a range of 2 to 2.5 percent, and capping account maintenance fees that have long been a source of frustration for retail customers. Also covered will be fees for interprovincial transfers, ATM cards and bank statements — charges that often catch customers by surprise when they use ATMs outside their home province or request paper records.

For small businesses, front-end fees for new credit lines are expected to be capped at 2.5 percent for loans up to 250,000 baht, a measure designed to make borrowing more accessible for the smallest enterprises that often struggle to meet bank eligibility requirements.

Slowing Loan Growth and Middle East Conflict Weigh on Sector

Mr. Vitai also discussed the prevailing weakness of loan growth in the banking sector, saying that economic conditions and uncertainty stemming from ongoing conflicts in the Middle East are weighing heavily on both lenders and borrowers. In response, the government and the central bank have introduced targeted financial measures to support borrower liquidity during a period of elevated energy costs and declining household purchasing power.

The central bank is seeking banks’ cooperation in supporting new lending and easing conditions for affected borrowers through three specific measures: a soft loan programme from the Government Savings Bank, the SME Credit Boost scheme, and the SME Secured Plus scheme.

Under SME Credit Boost, credit risks for financial institutions extending new loans to businesses — particularly SMEs — are reduced, helping to strengthen their business potential. The programme is also intended to support business liquidity during periods of elevated energy costs, which have been driven higher by the Middle East conflict. In addition, the scheme encourages SMEs to invest in energy transition initiatives aimed at reducing long-term energy costs, said Wipawin Promboon, assistant governor for the financial institutions policy group at the central bank.

SME Secured Plus, meanwhile, gives banks greater flexibility in valuing collateral by allowing them to consider borrowers’ cash flows alongside collateral value on a temporary basis. This measure is expected to make it easier for SMEs with collateral to access credit, even if their cash flow has been temporarily disrupted by external factors such as rising energy prices.

Household Purchasing Power Declines

The conflict in the Middle East has made global energy prices more volatile, hiking production costs for businesses and driving up the cost of everyday goods. Household purchasing power has declined as a result of higher living expenses and, in many cases, stagnating or declining incomes, directly affecting borrowers’ liquidity and debt repayment capacity.

The central bank has indicated that if banks wish to provide additional forms of financial assistance but face regulatory or operational constraints, they may consult the central bank to jointly consider appropriate approaches. Such assistance should be provided within the framework of maintaining financial system stability while ensuring appropriate support for debtors, Ms. Wipawin noted.

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For retail customers and small business owners, the standardisation of banking fees — combined with efforts to boost lending — offers a measure of relief at a time when every baht counts. But the central bank’s message is clear: standardised fees are coming, but they are not a panacea. The broader economy remains under pressure, and the Middle East conflict shows no sign of abating. Lower fees help, but they cannot fix a global energy crisis. The question is whether Thailand’s banks will cooperate fully or find ways to preserve their profit margins. The consultation period ends May 10. July is approaching. The clock is ticking.

-Thailand News (TN)