Cbank launches additional measures to restrict consumer lending

MOSCOW, Jun 11 (PRIME) -- The central bank has introduced additional measures to restrict the debt burden in unsecured consumer lending, and will launch markups to risk ratios depending on the debt burden and a full cost of a loan starting from October 1, the regulator said in a statement on Tuesday.

The measures are introduced to alleviate the risks connected with an increase of Russians’ debt burden, the central bank said.

At the same time, the authority wants to obtain powers to limit some loans in case the upper threshold of the debt burden is exceeded to discourage active provision of unsecured consumer loans and mortgages with low initial installments. The measure should also reduce the excessive debt burden of Russians.

A central bank’s poll of banks show that expansion of consumer lending roots in the loans taken out by people who are already burdened with debt.

“Data of the poll of banks show that the burden of borrowers is growing. In the first quarter of 2019, the share of loans with the level of debt burden above 80% amounted to 9.7%. This may mean that the expansion of lending happened thanks to the groups of people who are already burdened with debts,” the regulator said.

The regulator also plans to restrict the banks’ ability to collect overdue debt from people whose debt burden exceeds a certain amount. The bank plans to define the amount and start enforcing the measure in the second quarter of 2020, according to the bank’s plan of measures.

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