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Bank Overdraft Interest Cap Under BOT Notifications
Commercial Bank v Corporate Borrower
Composite summary — not a single reported case. This entry distils a settled line of Thai Supreme Court (Dika / ฎีกา) authority for legal education. It is not a transcript of one reported judgment, and the heading is not a citable case number. Do not cite it as specific case law — consult a Thai-qualified lawyer for the authoritative Dika number and current application.
Facts
Corporate borrower disputed accrued overdraft interest after default, arguing the bank applied a contractual rate exceeding the Bank of Thailand ceiling for overdraft facilities at the relevant period.
Legal Issue
Whether a contractual overdraft interest rate exceeding the BOT-notified ceiling is enforceable, and whether excess interest must be refunded or set off.
Holding
The line of Supreme Court rulings has consistently held that interest rates above the Bank of Thailand Notification ceiling are unenforceable to the extent of the excess; the lawful interest is recoverable only at the ceiling rate.
Reasoning
The Civil and Commercial Code §654 caps general interest, and BOT Notifications under the Financial Institutions Business Act B.E. 2551 (2008) set the regulatory ceiling for bank lending. Contractual freedom under §150 is constrained by mandatory financial-regulatory provisions.
Significance
Banks must align contractual rates with the prevailing BOT ceiling; borrowers can challenge excess interest as overpayment.
Practical Takeaway
Corporate borrowers should compare contractual rates against the BOT ceiling at the time of drawdown; banks should periodically re-paper to the current ceiling.
Cited Statutes
- Civil and Commercial Code §654
- Financial Institutions Business Act B.E. 2551 (2008)
- BOT Notifications on lending rates
This entry summarises a representative line of authority from the Thai Supreme Court (ฎีกา). It is intended for general legal education only and is not a substitute for advice from a Thai-qualified lawyer. Individual Dika case numbers are being verified against primary sources; until then these entries are presented as composite doctrinal summaries.
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