Responsible Lending

A Significant Step in promoting Sustainable Banking in Thailand

The memorandum of understanding on Sustainable Banking Guidelines: Responsible Lending aims to serve as a framework for commercial banks, which play a critical role as capital allocators in driving economic system, to conduct business under the principles of “Sustainable Banking.” This means integrating Environmental, Social, and Governance (ESG) aspects into the development of responsible lending policies and strategies, as well as having processes to manage risks and impacts arising from banks’ lending activities.

Responsible Lending Guidelines consist of 4 key components that commercial banks should prioritize to ensure the effective implementation of their responsible lending strategies. These components are as follows:

1. Commitment and Tone from the Top: ensuring the implementation of responsible lending practices for both internal and external stakeholders.
2. Stakeholder Engagement: aligning bank’s operation with Environmental, Social, and Governance (ESG) principles and assessing both direct and indirect impacts of bank’s lending activities.
3. Internal Implementation Mechanisms: covering the development of policy, lending procedures, and risk management. This also includes ensuring personnel’s capabilities and readiness to effectively implement responsible lending within the organization.
4. Transparency: disclosing bank’s information on responsible lending to the public, to demonstrate bank’s commitment and establish mechanisms to monitor bank’s operations.