A Commercial Collateral Bill (the"Bill") aimed at increasing the types of assets that can be used as collateral was approved by the Thai Cabinet on 9 July 2009.
Under the current law, only a limited variety of assets can be given as collateral, such as mortgages and pledges. This prevents borrowers from using other forms of assets that have commercial value as collateral, which often precludes them from being able to obtain loans to enhance their businesses.
To resolve this issue, the Bill was proposed to expand the types of assets that can be used as collateral which should enable borrowers to make use of more of their assets and properties when applying for loans.
Highlights of the Bill
To support the effect of the said Bill, amendments to the Civil and Commercial Code were also proposed to allow creditors to claim full repayment should there be a default on a mortgage and the proceeds from public auction of the mortgaged properties do not cover the total debts.It is expected that the new Bill, if it becomes law, will help companies seek bank lending thereby facilitating economic recovery.
For inquiries related to this Client Alert, please contact:
Peter Burke ( )
Sudkhate Jungcharoen ( )
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