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Banks to be prohibited from selling loans 60+ days past due to collectors
Banks are to be prohibited from transferring individuals' debts past due over 60 days to collectors. Such a bill will soon be submitted to the State Duma by Yaroslav Nilov who chairs the Duma Committee on Labor, Social Policy and Veterans' Affairs.
According to the National Association of Professional Collection Agencies (NAPCA), the share of citizens' debts not exceeding 50 thousand rubles has been decreasing in Russia for the second year in a row, although they still account for 31% of the total number, the explanatory note to the bill reads.
At the same time, the volume of larger overdue debts is growing: over the past year, the share of RUB50-200 thousand loans has increased to 26% and the share of RUB200-500 thousand loans grew to 22%. RUB500 thousand-1million loans account for 12% and borrowers with debts exceeding 1 million account for another 9%.
“More than half of the country's population pays off one to three loans at a time, while over 30% of citizens spend monthly more than 50% of their income to repay loans. The amount of citizens’ debt remains high,” the document states.
It also notes that a widespread practice of transferring overdue debts to third parties (collection agencies) still persists in Russia. This often results in a violation of the rights of debtors, a higher social tension and a deterioration in the quality of life of borrowers.
As noted in the bill, banks and other credit institutions are by no means limited in their legal capacity to collect overdue debts on their own. However, for various reasons, it’s more rewarding for them to sell debts to collectors, who do not disdain any methods that banks cannot afford.