Interest Rate Capping and Performance of Commercial Banks in Bangkok, Thailand

Q3 Economics, Econometrics and Finance

Afro-Asian Journal of Finance and Accounting Pub Date : 2023-11-07 DOI:10.53819/81018102t5274

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Abstract

Interest rate capping is a regulatory mechanism designed to limit the maximum interest rates that banks can charge on loans and credit products, with the primary aim of protecting consumers from usurious practices. However, this practice presents a complex challenge as it can impact the profitability of commercial banks by constraining their interest income. To thrive in this regulatory environment, banks should balance profitability concerns with the imperative to provide fair and accessible financial services to their customers while complying with interest rate caps. The study adopted the descriptive research design. The target population was 25 commercial banks in Bangkok, Thailand. The study did sampling of 20 respondents that were chosen from the target population of 25 commercial banks in Bangkok, Thailand. Questionnaires were used to gather the data. In conclusion, the relationship between interest rate capping and the performance of commercial banks in Bangkok, Thailand is a delicate balancing act. While interest rate capping seeks to protect borrowers and promote financial stability, it can also pose challenges to the profitability of commercial banks. The ultimate success of this regulatory practice hinges on the ability of banks and regulators to collaborate in creating a regulatory environment that safeguards the interests of consumers, maintains financial stability, and fosters a competitive and sustainable banking sector. The study recommended that Thailand should implement a flexible regulatory framework that allows for periodic reviews and adjustments of interest rate caps based on economic conditions. Commercial banks should focus on effective risk management, adopting advanced credit assessment tools and diversifying revenue streams through innovative financial products to mitigate the impact of reduced interest income. Additionally, promoting financial education and enhancing consumer protection measures will empower borrowers to make informed financial decisions while ensuring transparent lending practices in a regulated environment. Keywords: Interest Rate Capping, Performance, Commercial Banks, Thailand

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泰国曼谷商业银行的利率上限与绩效

利率上限是一种监管机制，旨在限制银行对贷款和信贷产品收取的最高利率，其主要目的是保护消费者免受高利贷行为的侵害。然而，这种做法提出了一个复杂的挑战，因为它可以通过限制其利息收入来影响商业银行的盈利能力。为了在这种监管环境中蓬勃发展，银行应该平衡盈利问题，同时向客户提供公平、便捷的金融服务，同时遵守利率上限。本研究采用描述性研究设计。目标人群是泰国曼谷的25家商业银行。该研究对泰国曼谷25家商业银行的目标人群中选出的20名受访者进行了抽样调查。调查问卷被用来收集数据。总之，利率上限与泰国曼谷商业银行业绩之间的关系是一种微妙的平衡行为。虽然利率上限旨在保护借款人并促进金融稳定，但它也可能对商业银行的盈利能力构成挑战。这种监管实践的最终成功取决于银行和监管机构合作创造一个监管环境的能力，该环境能够保护消费者的利益，维护金融稳定，并促进银行业的竞争和可持续发展。该研究建议，泰国应实施一个灵活的监管框架，允许根据经济状况定期审查和调整利率上限。商业银行应注重有效的风险管理，采用先进的信用评估工具，通过创新金融产品实现收入来源多元化，缓解利息收入减少的影响。此外，促进金融教育和加强消费者保护措施将使借款人能够做出明智的金融决策，同时确保在受监管的环境中进行透明的贷款操作。关键词:利率上限，绩效，商业银行，泰国

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来源期刊

Afro-Asian Journal of Finance and Accounting Economics, Econometrics and Finance-Finance

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： Finance and accounting are seen as essential components for the successful implementation of market-based development policies supporting economic liberalisation in the rapidly emerging economies in Africa, the Middle-East and Asia. AAJFA aims to foster greater discussion and research of the development of the finance and accounting disciplines in these regions. A major feature of the journal will be to emphasise the implications of this development and the effects on businesses, academics and professionals. Topics covered include: -Asset pricing, corporate finance, banking; market microstructure -Behavioural and experimental finance; law and finance -Emerging economies: finance, audit committees, corporate governance -Islamic finance, accounting and auditing -Equity analysis and valuation, venture capital and IPOs -National GAAP and IASs compliance, harmonisation and strategies -Financial measurement/disclosure, and the quality of information reported -Accountability and social/ethical/environmental measurement/reporting -Cultural, political, institutional impact on financial measurement/disclosure -Accounting practices for intellectual capital and other intangible assets -Provision of non-audit services and impairment to auditor independence -Audit quality and auditor skills; internal control/auditing -Management accounting, control and /use of key performance indicators -Accounting education and professional development, accounting history -Public sector and not-for-profit accounting