GSB to introduce reverse mortgages

Economy May 26, 2017 12:29


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THE GOVERNMENT Savings Bank will make reverse mortgages available to the elderly next month.

Elderly-friendly banking services now form a crucial part of GSB’s 2017 strategy, it says.

“We take up such initiatives because we are well aware that Thailand is becoming an aged society,” GSB president Chatchai Payuhanaveechai announced this week.

A reverse mortgage allows homeowners to convert their residence into cash. Instead of making monthly mortgage payments, they will gradually receive the loan amount in instalments over a long period of time until they die or until the approved loan amount is fully exhausted.

If they die, their heirs will have the option of paying back the loan including interest to reclaim the home or of simply stepping aside for the GSB to go ahead with foreclosure.

Such banking services promise elderly homeowners not just cash for their daily expenses but also a roof over their head, the bank says.

The reverse-mortgage option will complement GSB’s other elderly-friendly banking services, such as special interest rates.

Chatchai said elderly-friendly banking services were one of the six tools for the GSB’s “New Century” strategy this year. The other five are sufficiencyeconomybased management, the promotion of savings and financial discipline, solutions to outofsystem debts, SMEs Start up, and DigiThai Banking.

So far this year, the GSB has approved Bt1.82 billion worth of loans to small enterprises under its “SMEs Start Up Thailand” project.

Under its “Digi-Thai Banking” programme, it has made some digital services available 24 hours a day and has been upgrading its mobile banking (MyMo) services. MyMo has made it possible to withdraw cash from an automated teller machine with a QR (quick response) code. Soon it will facilitate QR code-based payments at some shops as well.

“We have developed our products and services so as to provide fast, convenient and reliable services to people,” Chatchai said.

The GSB expects its lending to expand by 3 per cent or about Bt58 billion this year. As for deposits, it expects 3-per-cent growth or an increase of Bt64 billion for 2017. Total profit, it hopes, should be around Bt21 billion this year.

“During the first four months of 2017, we recorded net profit of Bt8.656 billion,” Chatchai said.

He said that as of April 30, GSB lending had grown by 3.9 per cent from the end of 2016 partly because of the government’s economic-stimulus packages, which included various types of loans.

He said the GSB had actively responded to key government policies including the policy to help people escape from loan sharks. Among the solutions is a project to extend soft loans to people needing urgent cash. Applicants can seek loans of up to Bt200,000 under the project per household. 

Since the GSB started implementing this project in late February, more than 140,000 people have come forward to register for financial help, and more than 15,000 have been granted soft loans.Chatchai disclosed that the GSB also planned to promote Thailand’s street food in a powerful way through branding and clear sets of standards.

“For example, we may give ‘GSB’s Recommended Eating Places’ certifications to vendors who offer delicious dishes and comply fully with proper hygienic standards,” he said, adding that GSB would offer loans at a special interest rate to streetfood vendors too.