The requirements for the models that banks use to assess borrowers’ incomes when calculating their debt service-to-income ratios (DSTI) will change from 1 November 2024. The relevant amendments have been made to Bank of Russia Ordinance No. 6579-U.
One of the innovations is requirements for the representativeness of factors that have a material effect on borrowers’ incomes. Instead of annual model quality reports, banks will submit their models to the regulator for assessment every year. The model quality criteria have been adjusted. The amount of consumer loans for which DSTI may be calculated using the model-based approach has been raised from ₽1 million to ₽2 million.
The models submitted to the Bank of Russia for approval before 1 November 2024 should comply with the current version of the Ordinance.
Until 31 December 2025 inclusive, banks granting loans of up to ₽50,000 or car loans are allowed to assess borrowers’ incomes using internal methods.
Preview photo: Dina V / Shutterstock / Fotodom