The Bank of Russia may take additional macroprudential measures if the rapid growth of the unsecured consumer lending segment in the country continues, said the chairman of the regulator Elvira Nabiullina during a press conference.
“We continue to be particularly concerned about the unsecured consumer lending segment, where annual growth rates are still increasing, including due to the base effect. If the current trends continue, we do not exclude the adoption of additional macroprudential measures to cool this segment of the credit market – in addition to those already provided for from October 1, ”she said.
The Central Bank has already raised macroprudential premiums on unsecured consumer loans twice this year. The first measure came into force on July 1: then the size of the allowances returned to the pre-pandemic level. In addition, the regulator decided to tighten the issuance of this type of loans from October 1 against the background of signs of “overheating” in this market. For example, starting next month, premiums on loans to borrowers with an indicator of debt burden (PIT, the ratio of monthly loan payments to income) above 80% will increase from current levels by 0.4–0.9 percentage points, depending on the total cost of the loan.
Such macroprudential measures do not prohibit the issuance of loans to borrowers, including those with a high debt burden. However, they increase the cost of loans for banks: they are forced to create large reserves for loans.
The last tightening of the rules for issuing consumer loans was undertaken by the Central Bank due to the fact that in the second quarter of this year there was a weakening of lending standards: an increase in personal income tax of borrowers, an increase in the share of long-term unsecured loans (over five years) and banks softening other components of credit policy. Thus, the average size of personal income tax on consumer loans reached a “high level” of 61.1%, the regulator explained earlier.
Nevertheless, the volume of issuance of such loans continued to grow. According to the research company Frank RG, in August the Russians received cash loans for a record 647 billion rubles. This is 23.1 billion rubles. more than April, when the last record was set, and 7% higher than July values.
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