Terms of vacation credit, introduced by the government to support citizens against the background of the pandemic coronavirus, while only a small portion of borrowers. Experts consider it necessary to expand the limits of the size of loans for which the deferral of payments and to review the treatment of debt, including individual entrepreneurs. Central Bank ready to consider these ideas, and in parallel, banks are actively developing their own programs of debt restructuring. However, with the growing number of preferential borrowers will increase and the potential problems of the banks. Now their costs of the new benefits is estimated at 150-160 billion rubles a Month viitanen the conditions of developing financial crisis caused by the pandemic, the Russian authorities began to take measures to support Bank customers. In particular, on April 3 entered into force the law No. 106-FZ, which regulates the provision of credit vacation citizens.The holidays present the opportunity to obtain a deferment of repayment of principal and interest on limited size loans for a period of up to six months. They can be used by individuals, individual entrepreneurs and SMEs.”The focus has been on the poorest borrowers,— explained earlier, the head of the Duma Committee on financial market Anatoly Aksakov.— They were buying more cheap apartment, then took smaller loans. This category is completely falls under the relevant criteria”. Those who drive expensive cars, can sell their reseeding on a cheaper car, and those who buy expensive housing, obviously, can find other ways of solving their problems, said the Deputy.The credit card limit for individuals set at the level of 100 thousand rubles, consumer loans -250 thousand rubles, car loans — 600 thousand rubles, the mortgage — 2 million rubles, with the exception of Moscow (4.5 million roubles), the Moscow region, St. Petersburg and the far Eastern Federal district (RUB 3 million). Requests for vacation must be submitted by 30 September.But use them for the borrower when performing a number of conditions: the agreement is designed to 3 April 2020, the income for the month prior to the date of the treatment has declined by at least 30% compared to the average monthly income of 2019. Entrepreneurs can use the holidays on loans in the amount of 300 thousand rubles., if revenue fell more than 30%. The activities should be attributed to affected industries, which are specified in the relevant government decree.According to the Bank, by the beginning of may Russian citizens have filed 1.4 million applications for debt restructuring. Almost 90% of the applications banks examined, the proportion of approval was 58.5%. However, in the framework of the law on credit holidays, there have only been 210 thousand. “Borrowers are not ready yet to evaluate how it can change their capacity to pay for IU��e development of the situation, what will happen to their employment and income,”—noted in PSB, adding that “April was a month of waiting”. In MTS-Bank to add that “someone while there is a financial safety cushion, which are paid for loan commitments”.Polite otkazalsa is, however, more than one third of the applications considered citizens were refused. According to the Central Bank, 76.2% of cases they were associated with exceeding the maximum size of the loan. It is determined by the original amount of the debt, not the balance due.The evaluation of the joint credit Bureau (OKB, holds more than 410 million credit histories), just under the established criteria are approximately 80% of credits, but for certain types — less than half. The head of the OKB Arthur A. calls a “particularly sensitive” situation for borrowers from Moscow and St. Petersburg. For example, in Moscow the average size of consumer loan is 528 thousand rubles, and to buy a car, residents of the capital took an average of 1.2 million rubles., says the top Manager in both cases, the average loan size exceeds the limit twice.Among the common reasons of rejection, the experts point to the difficulty of confirmation of income reduction by 30%. According to the head of the Luxembourg office of the consulting group KRK Group Nikita Ryabinina, the question is relevant for entrepreneurs, as the reference to revenue makes for a lot of companies the service is not available in the extent in which it may be necessary to stabilize the business.Entrepreneurs have already drawn deputies ‘ attention to the lack of limits on credit vacation. So, in the letter to the government from the Chairman of the Committee for the control and regulation of the state Duma Natalia Kostenko said that the majority of entrepreneurs were issued loans for the development of business in the amount of average up to 1 million rubles. Businessmen think it is wrong to define the limit of the source, not the residual amount of the loan.Bankers call other reasons for the refusal. “For example, the borrower has lost revenue until March 2020, and sometimes even in 2017-2018, or has a large delay accumulated before March, or work the lost family member who is not a co-borrower”,— noted in the PSB.Many objectors is the possibility of restructuring of loans in their own programs of banks. Many financial institutions are ready to relax hard limit on the amount of the loan or postpone the date of payment, or extend the grace period — generally up to 12 months. In the “URALSIB”, for example, take an individual decision on benefits if it is impossible to provide a 2-NDFL or 3-NDFL.As a result of the restructuring of the banks enjoy a higher demand than government vacation credit. So, VTB in April has approved 13 thousand applications for the state program totaling nearly 17 billion ru��., own more than 141 thousand applications for 111 billion roubles In the savings Bank on April 24, according to the state program was approved on 30 thousand applications 9.7 billion rubles, and own programs — 67 thousand applications for 48.4 bn RUB Painful meramente the regulator is already considering some changes to the criteria. Kommersant’s sources in the Central Bank recognizes that statutory limits on credit vacation is too low — they need or significantly improve, or be removed altogether.That the head of the Central Bank Elvira Nabiullina at a meeting with deputies of the state Duma has supported the offer of vacation credit based on the balance outstanding, not the original amount of the debt, said the leader of the faction “United Russia” in the state Duma Sergei Neverov. He also drew the attention of the head of the Central Bank on the problem of calculating limits on overdraft for entrepreneurs, which primarily affected small and medium-sized businesses, and offered to expand the practice of vacation credit for an overdraft.”The necessity of vacation credit on overdraft, we find extremely relevant, because the interest rates are usually much higher, and the convenience of overdraft in business it is invaluable, therefore providing delays extremely useful measure of support”— analyst GK “ALOR” Alexei Antonov. According to the head of the Department experts on the stock market “BCS” Basil Karpunina, all vacation credit for overdraft will increase the number of borrowers from small and medium-sized businesses that will benefit from the program. MS Nabiullina, according to Sergey Neverov, has promised to deal with this issue.In this situation, bankers expect growth of applications for vacation credit, noting that customers try to take advantage of the benefits to the maximum. “Caught in a difficult situation, the client will always prefer support for as long as possible”,— explained in the savings Bank.However, the number of banks indicate that not all borrowers understand that vacation credit is not free, the majority perceives them as an opportunity not just to pay the loan. This situation threatened the banks accumulation of arrears that require additional reserves.At the time of granting vacation of direct losses, the Bank is not responsible, but in most cases (especially if holidays are provided by government programs, not private programs of banks) are the delay of repayment of interest and postponement of time of payment at the end of the loan term, says Vice-President Moody’s Olga Ulyanova. “Under the most unfavorable scenario (if the borrower’s income will not be restored) the Bank may suffer loss as the principal amount of the loan and percent on it,” she adds.”Due to the mechanism of vacation credit deterioration of the assets will be smoothed and stretched for a longer period. If holidays were not, we would have seen a greater surge in overdue loans in the second and third quarters,” says Fitch analyst Anton Lopatin.The regulator has confirmed that it will not consider loans restructured within the framework of assistance programmes to industries and enterprises affected by the pandemic coronavirus, as problematic and will not require the accrual of additional reserves, says Olga Ulyanova.However, while no single approach to reflect banks of such credits in the accounts under IFRS. “If, regardless of easing of the Russian regulator, a large proportion of such loans will be referred to the so-called stage 3 (i.e. bad loans), then accordance with IFRS, provisions for them should be charged immediately for the entire life of the loan, which will lead to significant additional reflection losses of banks in their reporting according to international standards”,— says Olga Ulyanova.Therefore, it should be taken into account and the interests of the banks, as in the absence of demand for various goods and services, credit risks are increasing, stresses Nikita Ryabinin. According to Anatoli Aksakov, the costs of the Russian banking system for the provision of vacation credit in the current view will be at least 150 billion rubles, the Head of Sberbank German Gref called the vacation “a painful measure,” evaluating losses of credit institutions at the level of 160 billion rubles. Cherenkova Olga, Xenia Dementieva the US government has adopted several programmes which provide relief for the payments of virtually all types of loans — from the educational to the consumer, including credit cards, from mortgages to car. For example, the payment of interest on government student loans were granted an extension until September 30, 2020. Loan relief from private companies, for example, is a program of US Bank, under which a mortgage borrower may not pay dues within 180 days. Citibank offers a variety of loan relief for its customers, including a deferral for 90 days of payments on mortgage loans, no penalty fees for overdrafts on credit cards for up to two months deferral on educational loans and mortgages. A three-month reprieve on mortgage payments, the Bank also offers a Wells Fargo, the conditions for the rest of credit relief measures are discussed individually.In Europe the assistance is intended to ease the credit burden on citizens comes from the ECB and national governments. In Germany, consumers can qualify for a deferral on payments of various loans for up to three months, if the borrower will present ample evidence for a substantial reduction in income because of the epidemic. Deferral for a period of several weeks to several monthsazev provided for mortgage borrowers in Italy and Spain. In the UK banks can grant a delay on payment of fees or interest on credit cards or overdraft for up to three months. In addition, banks can grant a delay on payment of consumer loans for up to three months if the financial situation of the borrower has significantly deteriorated because of the epidemic and quarantine.Eugene Tail
