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22/11/2024
Friday
THIS DAY IN HISTORY:
22 November 
1970 The city of Naberezhnye Chelny was renamed Brezhnev. The first name was returned to the city in 1988.
1970 The US President John F. Kennedy was killed.
1970 Abortions were allowed in the USSR in case pregnancy threatened the mother's life.
22 November
1970 The city of Naberezhnye Chelny was renamed Brezhnev. The first name was returned to the city in 1988.
1970 The US President John F. Kennedy was killed.
1970 Abortions were allowed in the USSR in case pregnancy threatened the mother's life.
THE CENTRAL BANK INTENDS TO TIGHTEN ITS APPROACH TO CREDIT RISKS
The Bank of Russia is going to join the fight against unfair credit risk management, when financial institutions transfer debt from problem borrowers to third parties to conceal real risks. The Central Bank has published on its website a draft amendment to Regulation No. 590-P, which defines the procedure for the formation of reserves for theoretical loan losses.
The draft amendments suggest that loan servicing cannot be considered appropriate if there is a transfer of debt from the borrower to another person. If the debt has been transferred under a restructured loan to other persons, debt servicing is considered unsatisfactory. But in the event that during the last 360 days the debt was repaid on time in the prescribed amount, the quality of debt service can be assessed without taking into account the transfer of debt. In the event of a deterioration in the quality of service, the estimated loan reserves are to be determined based on the maximum amount provided for the quality category into which the loan was classified.
The regulator also suggested that a change in the terms of the loan agreement, made at the request of the law and not related to the deterioration of the debtor's monetary situation, should not be considered as a restructuring.
The amendments may enter into force on October 1 of this year.
The draft amendments suggest that loan servicing cannot be considered appropriate if there is a transfer of debt from the borrower to another person. If the debt has been transferred under a restructured loan to other persons, debt servicing is considered unsatisfactory. But in the event that during the last 360 days the debt was repaid on time in the prescribed amount, the quality of debt service can be assessed without taking into account the transfer of debt. In the event of a deterioration in the quality of service, the estimated loan reserves are to be determined based on the maximum amount provided for the quality category into which the loan was classified.
The regulator also suggested that a change in the terms of the loan agreement, made at the request of the law and not related to the deterioration of the debtor's monetary situation, should not be considered as a restructuring.
The amendments may enter into force on October 1 of this year.
12.01.2024
