The Central Bank of the Russian Federation will guide banks, microfinance institutions, and collections firms on how to manage debts owed to multiple creditors. The aim is to streamline the recovery or restructuring process for shared borrowers, with attention to market stability and consumer protection.
“The Bank of Russia supports market participants signing brokered inter-creditor agreements that provide a unified approach to recovering or restructuring debts for clients who owe money to more than one lender,” stated a senior official from the central bank’s consumer protection division. This initiative aligns with broader efforts to improve access to financial services and ensure fair treatment across the sector.
Data from the Bureau of Credit Histories indicates that about one in three Russian borrowers holds two or more active loans across different banks. In such cases, lenders often compete: some rush to court for debt collection, while others favor negotiation or restructuring to preserve the borrower’s capacity to repay.
According to the Central Bank, temporary income reductions may lead to delays in consumer loans while borrowers work to meet mortgage obligations. There have even been instances where a lender filed suit, then borrowers sought bankruptcy protection, and a second lender remained unaware of the situation, assuming the mortgage had been paid in full. This highlights the need for transparent, coordinated action among creditors.
The Ugly Legacy of the 1990s
In the State Duma, a bill was introduced on April 20 to grant individuals the right to request a ban on new loan issuances. Proponents argue this measure would prevent fraudulent credit taking through improper use of personal data and social engineering techniques.
If enacted, citizens could file with credit bureaus to request a ban on lending to their name. Earlier this year, a proposal to restrict debt collection activities in Russia was described as addressing an “ugly legacy of the 1990s” in media discussions.
Leaders of major banking associations warned that prohibiting collectors could raise the cost of credit for borrowers. Banks rely on lawful collection activity as a core part of managing repayment risk, and removing this tool could affect overall market stability and lending costs.
Supporters argue that responsible, professional collection practices help maintain borrower accountability and protect customers who do fulfill obligations, while critics caution against unintended consequences for the finance ecosystem.
How Much “Free Money” Do Russians Have?
Against this backdrop, measures of discretionary household funds declined in early spring, according to a market study series. The analysis found that the share of household funds remaining after essential expenses fell to around 20 percent in March 2023, reflecting tighter budgets among households.
Meanwhile, consumer expenditures rose, with weekly average spending up by several percent, signaling shifts in living costs and consumer behavior. In retail, average purchase amounts increased modestly, maintaining a trend of higher monthly expenditures compared with the previous year.
These indicators underscore the tension between debt obligations and household budgets, especially when income fluctuates or costs rise. For lenders, the challenge is to design products and collections strategies that respect consumer limits while preserving credit access and market integrity. For borrowers, prudent borrowing and timely repayment remain essential to maintaining financial health and creditworthiness.
In short, the evolving regulatory environment and market dynamics suggest a move toward more coordinated credit management, clearer consumer protections, and careful calibration of loan terms to reflect real earnings and living costs in the broader economy.