The Bank of Russia has announced plans to implement macroprudential limits (MPLs) on banks and microfinance organizations in the mortgage and car lending sectors. This initiative aims to more effectively manage the elevated debt burden among individuals and ensure financial sector stability. The regulator has conducted an analysis of MPL usage in unsecured consumer lending and developed strategies for applying these limits in other segments.
According to the analysis, MPLs reduce the proportion of risky loans more quickly compared to macroprudential add-ons. Additionally, risk accumulation in mortgage lending may lead to significant social consequences.
The introduction of MPLs in mortgage lending will occur gradually. The Bank of Russia anticipates that this approach will allow for a reduction in the macroprudential add-ons currently applied in this segment, which are set at a restrictive level.
A draft law authorizing the Bank of Russia to establish MPLs in mortgage and car lending is scheduled for consideration by the State Duma during its second reading soon. If passed, the relevant amendments could become effective from April 1, 2025.