MOSCOW, Oct. 1The Bank of Russia is once again tightening macroprudential limits on consumer loans and microloans, now limiting their issuance to borrowers with a debt burden of 50% or more.
The Central Bank has introduced limits on consumer loans for banks and microfinance organizations since the beginning of this year. Initially, they only acted on loans to borrowers with a debt burden above 80% — banks with a universal license could provide them with a maximum of a quarter of all loans issued. However, already in the third quarter the limits were reduced to 20%.
Now the Central Bank has again decided to tighten regulation: now banks will be able to issue only 5% of all loans to heavily over-leveraged borrowers during the quarter, and will also have to limit loans to borrowers with a debt burden in the range of 50-80%. They should now account for no more than 30% of consumer loans provided during the quarter and 20% of credit cards issued.
At the same time, banks continue to have a 5% limit on issuing consumer loans for a period of more than five years.
Restrictions for microfinance organizations are a little looser: they are allowed to issue up to 15% of microloans to the most debt-ridden Russians, while for citizens with a debt load of 50% or more, the limits are similar to bank ones.
The Central Bank noted that the new limits will reduce the volume of loans provided in the fourth quarter by 22% relative to the volume that banks would have provided if the regulation had not changed. At the same time, the regulator believes that new measures will reduce the growth rate of the loan portfolio by the end of 2023 by 6 percentage points, but will make the lending structure more balanced, which will ultimately reduce the debt load of citizens, the risks of banks and microfinance organizations.