On January 1, new Central Bank restrictions on issuing loans and credit cards came into force in Russia. Thus, the rules for issuing funds have been tightened for banks and microfinance organizations (MFOs).
It is now allowed to issue only a quarter of the quarterly volume of consumer loans to clients with a relatively high debt load (from 50 to 80%), although previously there was a limit of 30%. In addition, the limit on issuing credit cards to the same group of borrowers is being reduced from 20 to 10%.
For MFOs, the permissible share of loans issued to clients with a personal income tax of 50 to 80% also decreased to a quarter of the quarterly volume.
Previously, the requirements applied only to loans to borrowers who were overly over-leveraged (PDN above 80%), but since October last year the regulation has extended to loans to customers with PDA of 50% or more.
According to the Central Bank, in the third quarter of 2023, the share of new loans to highly leveraged borrowers was 25% versus 36% before the introduction of the MPL, and the share of loans issued to clients with an average debt burden increased from 27 to 33%.
According to the regulator, tightening the MPL will accelerate the transition to a balanced structure of debt on consumer loans, which will ultimately reduce the risks of citizens, banks and microfinance organizations.
Read about other changes that came into force on January 1 here.
Source: Rosbalt
Mario Twitchell is an accomplished author and journalist, known for his insightful and thought-provoking writing on a wide range of topics including general and opinion. He currently works as a writer at 247 news agency, where he has established himself as a respected voice in the industry.
