The Central Bank began receiving complaints from borrowers about refusals to grant credit holidays—the right to postpone loan payments for up to six months. This information was shared with socialbites.ca through the organizer’s press service.
So far, the volume of complaints appears modest. Data collection for March applications is still in progress. During the epidemic, a credit holiday was offered to 164.7 thousand residents, totaling 85.1 billion rubles, according to the Central Bank’s press service.
Why are holidays denied?
According to Mikhail Mamuta, head of the Central Bank’s Consumer Protection Service, there are two objective reasons a credit holiday might be refused: if income reduction is not documented, or if the loan amount exceeds the government-imposed limits.
Under current law, citizens whose income in the prior month fell by at least 30% compared with their average monthly income in 2021 can qualify for a credit holiday. The program applies to loans within the government-set limits. As of now, consumer loans are capped at 300,000 rubles (350,000 rubles for individual entrepreneurs). For mortgages, the cap ranges from 3 to 6 million rubles depending on the region. Car loans are limited to 700,000 rubles, and credit card balances to 100,000 rubles.
The Ural Bank for Reconstruction and Development’s press service told socialbites.ca that requests for credit holidays from customers are accepted as long as refusals remain under 1%. The main reasons for rejection are non-compliance with program terms (44%) and previously granted holidays (56%).
In contrast, Anatoly Perfilyev, senior director of banking ratings at Expert RA, noted that banks reject up to half of their holiday applications.
“Typically, the denial stems from either an undocumented income decline or a loan amount exceeding the maximum allowed. It’s important to note that the cap is applied to the loan amount, not the remaining principal. For example, if a person needs to repay a consumer loan of 150,000 rubles, it seems eligible since it’s under the 300,000 ruble limit. But if the initial loan amount exceeds 300,000 rubles, the request falls outside the criteria, and banks have the right to refuse,” Perfilyev explained.
A similar assessment was given by Rosbank.
“About 40 percent of all holiday requests are rejected for not meeting the requirements,” said Evgeny Senkovsky, director of Rosbank’s overdue debts department.
What should you do if your vacation is canceled?
“Wait for the bank’s decision on the application. If the decision is negative, the bank should specify the reason for the refusal. If the reason is a mismatch between the submitted documents and legal requirements, provide the missing documents to the bank. Consider bank restructuring programs if the loan amount exceeds the law or if income reduction exceeds 30%. Banks also have flexible options: not only can they grant holidays, but they can adjust loan terms, such as extending the period of reduced payments, which may lower monthly obligations,” noted Nikolai Vasilevsky, Deputy Chairman of Absolut Bank.
Egor Krivosheya, Head of Research at the Skolkovo-NES Center for Financial Technology and Digital Economy Studies, added that a borrower can obtain any missing documents from the company’s accounting or HR department, such as a certificate of income, to support the case. He cautioned that if the denial is purely related to official loan size requirements, there is little room to overturn it.
Perfilyev also pointed out that there are instances where banks misinterpret or deliberately misapply the law to delay holidays.
“For instance, some refusals occur when a loan is temporarily delayed, or banks offer less favorable terms after the holiday, such as a rate increase, or demand collateral. In these cases, a complaint can be filed with the Central Bank.”
A representative of the Central Bank explained via a Telegram channel that if a credit holiday is denied, citizens should contact the bank through its online reception. “Each complaint will be reviewed. If a violation is found, the creditor will be instructed to proceed with the deferred payment. If no violation is identified, the bank will explain the reasons and outline the available options to the customer. There are possibilities in this case as well. When legal requirements are not met, banks themselves are advised to pursue credit restructuring within their programs. This approach also proved effective during the COVID crisis,” the representative said.