In an accommodative policy environment, the central bank anticipates improved loan growth in the banking sector to support the country’s sluggish economic expansion, Mr Vitai said, reports the Bangkok Post.
The Monetary Policy Committee voted unanimously last week to reduce the policy rate by 25 basis points to 1.25%, bringing the cumulative policy rate reduction this year to 1 percentage point.
Beyond supporting economic momentum, the central bank wants to ease the financial burden on vulnerable borrowers and improve access to bank financing for fragile segments, particularly small and medium-sized enterprises (SMEs).
SME loans have contracted for 13 consecutive quarters due to weaker demand in line with economic conditions, as well as tighter lending by banks amid rising credit risks in the segment.
"Despite limited monetary policy space, we still have room for further interest rate cuts to support the economy and vulnerable segments, especially SMEs," Mr Vitai said.
He said the central bank is collaborating with the Finance Ministry to implement a new credit guarantee scheme with a total credit line of B100 billion.
The programme is available to both SMEs and corporate borrowers, with credit limits of up to B100 million and B150mn per company, respectively.
The loan guarantee scheme is focused on potential industries aligned with the Reinvent Thailand initiative, including tourism, medical and wellness services, agriculture and agro-processing, automobiles and auto parts, intelligent electronics, retail and logistics.
The Finance Ministry is scheduled to sign a memorandum of understanding with financial institutions next week.
Following the policy rate cut, Kasikornbank announced a reduction of 0.25 percentage points to its minimum overdraft rate to 6.44% per year.
The bank is also lowering its minimum lending rate (MLR) and minimum retail rate (MRR) by 0.1 percentage points to 6.62% and 6.68%, respectively. The rate cuts take effect on Dec 22.
Krungthai Bank yesterday also announced a reduction in its minimum overdraft rate by 0.25 percentage points to 6.37%, along with cuts of 0.1 percentage points each to the MLR and MRR, bringing them to 6.40% and 6.945%, respectively. The revised rates will take effect on Monday.
Meanwhile, Kris Chantanotoke, chief executive of Siam Commercial Bank (SCB) said the bank is ready to support government economic measures, including the credit guarantee scheme.
SCB set a positive loan growth target for 2026, while maintaining its SME loan portfolio and continuing to provide financial assistance to the segment amid a slowing economy.
Chartsiri Sophonpanich, president of Bangkok Bank (BBL), said the bank is finalising its 2026 business plan and expects total loan growth to remain positive.
BBL stands ready to cooperate with government economic measures, including the new SME loan guarantee scheme, alongside its own financial support programmes for customers, said Mr Chartsiri.
"GDP growth next year is expected to be less than 2%, which would limit business expansion. As a result, the bank needs to adjust its business strategies and seek growth opportunities in both domestic and regional markets in line with economic conditions," he said.