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Bank of Russia to further refine its DTI calculation

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There are plans to develop and propose legislation to make lenders legally obliged to calculate the DTI ratio.

In addition, the 2021-2022 roadmap provides for the potential introduction of a new macroprudential toolset to ensure quantitative restrictions are in place on the share of high-risk loans, in particular, unsecured consumer loans issued to high-DTI borrowers.

Among the next two years’ priorities are improvements in the DTI calculation procedure following the credit history bureau reform, as well as those related to identifying the borrower’s average monthly income.

The report notes that Bank of Russia regulations released in 2019-2020 were designed to update the borrower’s DTI calculation method.

The effort saw a check on DTI calculation methodologies in place at 346 credit institutions and 78 microfinance organisations as regards their compliance with regulations.

The monitoring of how the DTI ratio is applied as a tool to maintain financial stability was based on quarterly surveys of top credit institutions’ loan portfolios; a new form of reporting on individuals’ debt burdens was introduced.

As part of the effort to design additional constraints on high-risk lending, the Bank of Russia published the consultation paper ‘Developing Bank of Russia Macroprudential Policy in Retail Lending’; the regulator also sent proposals for legislative amendments to related agencies.

See PDF here: https://www.cbr.ru/Collection/Collection/File/31906/inf_note_jan_2021.pdf

See PDF here: https://www.cbr.ru/Collection/Collection/File/31908/inf_note_jan_2021_1.pdf

See PDF here: https://www.cbr.ru/content/document/file/79964/consultation_paper_190910.pdf

This news item was originally published by the Central Bank of the Russian Federation (CBR RU). For more information, see the Source Link.

Regulator Information

Abbreviation: CBR
Jurisdiction: Russian Federation

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