Central bank wants right to restrict mortgages

MOSCOW, Oct 30 (PRIME) -- The central bank plans to ask the Russian government to allow it to restrict mortgage loans like it restricted consumer loans, the authority said on Monday in draft directions for the development of the financial market in 2024–2026.

“In order to limit the systemic mortgage risks, the Bank of Russia will prepare a proposal to receive the power to set quantitative or macroprudential limits in the mortgage sector similar to the macroprudential limits in the unsecured consumer lending,” the central bank said.

This should limit provision of mortgage loans to the borrowers with high debt burdens and loans with small initial installments.

The central bank and the government plan to amend taxation of the long-term deposits with payment of interest at the end of the term. The authorities want to exempt the minimum non-taxable income for each year.

After the Russian economy has finished adaptation to the external shocks, the regulator wants to meet with the representatives of banks and discuss creation of a fund to support the banking system.

The central bank said that combined amount of bonds in circulation in Russia grew by 25% to 42.3 trillion rubles, or 27.6% of the gross domestic product in September 2023 as compared with the beginning of 2022. Bonds account for about 25% of all debt of Russian issuers.

The investment portfolios of non-government pension funds gained 4.6% in January–June to 5 trillion rubles and of insurance companies rose by 7% to 4.9 trillion rubles, while the amount of clients of brokers and trustees rose by 4 million people to 34 million people. Their assets reached 9.6 trillion rubles, the central bank said.

(93.2174 rubles – U.S. $1)

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