Strategic non-performing loan (NPL) debtors are those who do not intend to repay debts to the specialised bank, although they are still running their businesses.

SME Bank earlier warned its debtors to contact its branches for debt repayment and ordered the branches to tackle strategic NPLs by taking legal action against those who fail to cooperate with the bank for debt restructuring.

The bank's move came after Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula earlier said he would mandate all specialised banks' loan-loss provision requirements to be upgraded to the standard of commercial banks. This prompted speculation that several banks may have to raise capital to comply with the new standard.

SME Bank is expected to be the institution most affected by Pridiyathorn's policy as its proportion of NPLs is the highest among the specialised banks.

SME Bank president Pongsak Chewcharat said in a statement released yesterday that the bank had classified customers into three groups: debtors whose businesses are still running, debtors whose businesses have been shut down, and debtors who intend not to repay debts.

The bank has reviewed the three groups and found that most have already contacted the bank for debt restructuring. However, some have so far ignored the bank's warning or hardly cooperated with the bank, while a few whose debt value is quite high have still not made contact.

In addition, some are still running their business but are avoiding debt repayment. These are the strategic NPL debtors.

"The group that is not cooperating with the bank is low in terms of numbers but high in terms of value," Pongsak said. "Currently, the bank is arranging for our lawyers to prepare legal documents to sue debtors and their guarantors. The bank will allow them to contact us until the end of November, as we had earlier announced. If they still fail to contact us, they can wait for a court notice from us. The bank will take full legal action against them."

Aside from putting strategic NPL debtors on its blacklist, Pongsak said the bank would ask other state-owned parties to reduce their assistance to the debtors.

For example, the Export Promotion Department has given these SMEs a quota to promote their products overseas. The Industrial Promotion Department has given them training, while the Industrial Works Department has provided them with factory-licence facilitation.