A draft amendment to the Civil and Commercial Code Act (No. .. ) B.E. …. (“Draft Act”) was approved by the Cabinet as proposed by the Council of State and the Draft Act will be submitted to the Coordinating Committee of the House of Representatives and then submitted to the House of Representatives for further consideration before becoming to be enforced.
The key issue of the Draft Act is to revise interest rates to be consistent with the present economic circumstance as follows:
- The interest rate not being clearly specified by any juristic act or by any provision of law shall be revised from the rate of 7.5% per annum (Section 7) to 3.5% per annum. This interest rate can be adjusted by promulgating of a royal decree.
- The interest rate for default in payment of debt shall be revised from the rate of 7.5% (Section 224) per annum to 5% per annum.
- The interest rate for default in payment of debt in case of payment by installments shall be calculated only from principal amount of such installment.
- The provisions of this Draft Act shall be applied to interest which is due in payment from the date of their enforcement. Those provisions shall not cause effect to the interest charged before such enforcement but shall cause effect to the interest calculating based on all principal amount of debt as agreed between the parties to become void immediately once the Draft Act becomes enforced.