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Vladimir Putin to empower central bank to limit unsecured consumer loans
Russian President Vladimir Putin finds it necessary to empower the Bank of Russia to limit the volume of unsecured consumer loans.
“The Government of the Russian Federation, together with the State Duma and the Bank of Russia, shall ensure the adoption of a federal law to empower the Bank of Russia to impose direct quantitative restrictions on the amount of unsecured consumer credits (loans) provided by credit institutions and microfinance organizations,” reads the list of instructions of the head of state, published on the Kremlin website.
Putin established the deadline for this requirement to be met by December 1, 2021, and appointed Prime Minister Mikhail Mishustin, Speaker of the State Duma of the seventh convocation Vyacheslav Volodin and Bank of Russia Governor Elvira Nabiullina responsible for meeting the deadline.
On October 1, the Bank of Russia tightened the macro-prudential requirements for unsecured consumer loans, which makes the issuance of consumer loans less profitable for Russian banks. The central bank noted that this decision was driven by the accelerated lending growth accompanied by an increase in the citizens’ debt-to-income ratio and an increase in the share of long-term unsecured loans.
According to the Bank of Russia, the share of consumer loans with the debt-to-income ratio above 80% increased to 30.3% in Q2 2021.