Two state-owned banks -- Government Savings Bank (GSB) and GH Bank -- will trim their lending rates in a range of 10-25 basis points, following in the footsteps of the country's four largest commercial banks.
GSB will cut its minimum overdraft rate (MOR) by 0.10 percentage points to 7% and minimum retail rate (MRR) by 0.125 percentage points to 7%, effective from May 23.
The bank said its new MOR and MRR will be lower than the average rates of 7.059% and 7.184%, respectively, offered by the four commercial lenders.
"The rate reduction is aimed at supporting the government's policy and alleviating the interest burden of small businesses and individual clients," said Chatchai Payuhanaveechai, GSB's chief executive and president.
The four banks cut their prime lending rates earlier this week, with a focus on MRR, in a range of 25-50 basis points. The move was in response to Finance Minister Apisak Tantivorawong's call for banks to narrow the wide interest gap between large and small borrowers.
MRR is a rate for individual and small-business borrowers.
Bangkok Bank, Krungthai Bank and Kasikornbank slashed their MRR by 50 basis points, while Siam Commercial Bank (SCB) trimmed its MRR by 25 basis points.
SCB also cut two other prime lending rates, the minimum lending rate (MLR) and the MOR, by 25 basis points, while BBL lowered its MLR by 25 basis points.
Mr Chatchai said GSB plans to offer a 30% cashback package for paid interest to individual borrowers who take out loans worth up to 300,000 baht each.
Some 950,000 borrowers are expected to qualify for the interest cashback scheme, and the bank is seeking the Finance Ministry's approval.
The cash is estimated to be paid back to qualified customers from December this year to January next year, Mr Chatchai said.
GH Bank said in a release that it would slash its MLR and MOR by 15-25 basis points, effective from Monday.
The bank will cut its MLR by 0.15 percentage points to 6.25% and cut its MOR by 0.25 percentage points to 7%, while maintaining its MRR at 6.75%, a level GH Bank says is the lowest in the banking sector.