In order to limit the risks associated with an increase in the debt burden on the population, the allowances for risk coefficients depending on PDN and the PSKS Board of Directors of the Bank of Russia decided to set the following premiums for risk coefficients depending on the borrower’s debt burden (1) and full loan cost (CPM). The allowances for risk factors for unsecured consumer loans in rubles are provided from October 1, 2019, for which credit institutions are required to calculate the borrower’s debt burden indicator:
Interval PDN, %0-3030-4040-5050-6060-7070-80Свыше 80Интервал PSK, %0-100,30,30,30,60,70,91,110-150,50,50,50,70,81,01,215-200,70,70,71,11,31,41,620-251,01,01,01,51,71,82,025-301,31,31,31,81,92,02,230-352,02,02,02,12,22,32,5 Over 355,05,05,05,05,05,05,0 premium to the risk ratios for unsecured consumer loans in roubles provided from October 1, 2019, for which credit institutions are not required to calculate the indicator of the debt burden of the borrower:the Interval PSK, %0-1010-1515-2020-2525-3030-35Свыше 35Значение надбавки0,60,71,11,51,82,15,0 reference. The current premium to the risk ratios for unsecured consumer loans in roubles provided from April 1 to October 1, 2019:the Interval PSK, %0-1010-1515-2020-2525-3030-35Свыше 35Значение надбавки00,50,71,01,32,05,0 Installed premium risk factors are based on carried out by the Bank of Russia research portfolios of the largest banks in the market of unsecured consumer lending in the historical dynamics of credit risk depending on the UCS and PD and take into account the results of consultations with the banking sector.Unsecured consumer lending demonstrates rapid growth: may 1, 2019, the rate of growth in annual terms amounted to 25.3%. In recent months, the accelerated growth of debt load of the population for unsecured consumer loans. According to a survey of banks in the first quarter of 2019, the share of loans with ПДН2 above 80% was 9.7%.The increase in allowances will discourage the provision of unsecured consumer loans to borrowers with high PD and also contribute to the increase in the stock of banks ‘ capital to cover losses in the case that the implementation of external or internal risks will lead to decrease in incomes and deterioration in the quality of consumer loans._______________1 In accordance with the Instruction of Bank of Russia from 31.08.2018 No. 4892-U “On the types of assets characteristics of assets, which are set allowances for risk factors, and methods apply to the specified types of assets allowances for the purpose of calculating credit institutions the capital adequacy ratio” of a credit institution from October 1, 2019 are required to calculate PD in accordance with the rules established by the Bank of Russia in issuing new loans and limit increases on the cards.2 Evaluation of the PD according to the credit institutions
June 25, 2019When using the material, reference to the Press Service of the Bank of Russia is obligatory.
EDITOR’S NOTE: This is a translation from English Language to English.