BoT signs pact on mediation of legal financial disputes

The Bank of Thailand

The Bank of Thailand and the Office of the Court of Justice have signed a Memorandum of Understanding on Legal Financial Dispute Mediation for Borrowers in Financial Distress and Small and Medium Enterprises (SMEs).

The MoU provides a standard of practice for resolving disputes such as default in interest payments, stipulating an appropriate loan repayment period to align with debtors’ financial circumstances, and establishing a clear framework for resolving disputes. , according to the statement from the Bank of Thailand.

The memorandum of understanding will also aim to strengthen the financial expertise of court mediators so that borrowers and creditors put into practice the agreed framework of legal disputes, according to the statement.

In addition to reducing losses and the number of cases arising from litigation, the decision will help reduce the severity of the impact of high household indebtedness and the Covid-19 crisis, the statement said.

The central bank expects retail borrowers to benefit from this MoU, as borrowers will play a greater role in the negotiation process.

Once an agreement is finalized between the borrower and the creditor, the borrower will not be sued legally, while the creditor will benefit from the repayment of his debt.

The process of mediating legal disputes in court will not be complicated as a mediator will assist in the negotiation process to finalize a mutual agreement, the statement said.

The mediation process can also be conducted through various online platforms.

The central bank and its allies in various sectors aim to resolve at least 300,000 civil disputes related to the financial system in 2021, nearly a quarter of the 830,000 consumer cases registered in 2019.

Pamela W. Robbins