Thailand: New Law on Interest Overcharging
Related Practice Areas
January 23, 2017
The first enactment of Thailand’s Interest Overcharging Law, which came into effect in 1932, prohibited any person from loaning money to another person and subsequently charging them interest at a rate that exceeded the rate prescribed by the law.
Eighty-five years later, Thailand finally promulgated a new law focused on this topic called “The Act Prohibiting the Collection of Interest at an Excessive Rate B.E. 2560 (2017)” on January 15, 2017. The new law was made effective the following day, repealing the 1932 version.
A key element of this new law is the enhanced stringent penalties imposed on any person who loans money to an individual and then levies interest on repayments at a rate exceeding that permitted by law. This action will result in the offender facing criminal sanctions amounting to imprisonment for no more than two years, a fine of not more than THB 200,000, or both. These penalties are significantly stricter than those meted out under the previous Act, which only imposed up to a one-year imprisonment term, a fine of not more than THB 1,000, or both.