SCB To Create Debt Collection Company

Siam Commercial Bank plans to set up a debt-collection company on its own to improve loan repayment efficiency, according to president Kannikar Chalitaporn.

“Our debt collection unit will be upgraded to meet international standards in both operating efficiency and services rather than profitability,” she said yesterday.

SCB has no plans to provide debt collection services to other financial institutions. The new company will concentrate only on collecting debts for the bank and its affiliated companies.

Mrs Kannikar said the subsidiary would follow the new Financial Institution Business Act. The new company will officially operate from Aug 1 and the bank’s 400 staff responsible for debt collection will be transferred to the subsidiary.

“All of them will be treated the same under the bank’s existing employment agreement in terms of rights, salary, welfare, position and other benefits,” she added.

The bank will allow staff the option to tender their resignations from existing positions before transferring to the new company.

A number of staff protested against the move last week and representatives of the labour union plan to seek assistance from board director Chirayu Israngkul na Ayutthaya tomorrow.

Dr Chirayu is also director-general of the Crown Property Bureau, the bank’s largest shareholder.

Mrs Kannikar said employees who did not want to transfer to the new company could rotate to other business units of the bank.

Debt collection is a core business and it is not planning to sell off the new company as some staff feared, she added.

“If we wanted to sell it, we would have done this a long time ago. There are a lot of outsourcing companies offering debt collection services but we want to do its ourselves. We believe in our ability,” she said.

SCB, the country’s fourth-largest bank in terms of asset size, will charge debt collection fees of 250-350 baht per time on overdue payments of credit card loans from Aug 1.

SCB shares closed yesterday on the Stock Exchange of Thailand at 68.25 baht, up four baht, in trade worth 853 million baht.