From September 1 this year, the Bank of Russia will increase macroprudential premiums for consumer loans for credit institutions. According to the regulator, such a measure will affect all loans with a total cost above 25% per annum and all loans for borrowers with a debt burden above 50%, in other words, for those who spend more than half of their income on debt servicing.
The Central Bank explained the need to increase the allowances by the desire to increase the stability of banks in the event of an increase in losses on consumer loans.
The increase in premiums will not restrict lending to certain groups of borrowers directly, but will increase the cost of the corresponding loan for the bank and make it less profitable.
Currently, increased premiums apply only to loans whose total cost exceeds 35% per annum, as well as loans with a total value of 20% per annum for borrowers with PTI of 80% or more.
Thus, from September 1, 2023, surcharges will apply to all loans (regardless of the total cost) issued to borrowers with PTI over 50%; loans with a total cost of 25% per annum or more, regardless of the size of the borrower’s PTI; loans issued to borrowers without PTI.
According to the regulator, 82% of credit card disbursements and 66% of cash loan disbursements will fall under the new surcharges. After the entry into force of the measure, the average markup on newly granted loans will increase from 0.21 to 0.89.
Source: Rosbalt
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