New Self-Prohibition Law for Loans in Russia
Starting March 1, 2025, Russian citizens will have the ability to officially prohibit themselves from taking out loans, as outlined in a decree signed by Prime Minister Mikhail Mishustin. This new law allows residents to submit applications to limit loan issuance from banks and microfinance organizations (MFOs). Applications can be made electronically via the public services portal or in person at local multifunctional centers (MFCs).
Once a self-prohibition is established, it will be recorded in the individual's credit history, and banks will be required to check for this information before issuing loans. If a loan is granted despite the self-prohibition, the creditor will not be able to enforce repayment. The law aims to help protect citizens from fraud, particularly in cases where personal information is exploited to obtain loans without consent.
Addressing Loan Fraud Concerns
The initiative comes in response to a growing number of complaints about fraudulent loans being taken out in individuals' names, often without their knowledge. Mikhail Mamuta from the Central Bank highlighted the psychological tactics used by fraudsters, which can leave victims vulnerable. The self-prohibition law is seen as a proactive measure to combat these fraudulent practices, providing individuals with greater control over their financial decisions.
A cooling-off period of one day will be enforced after a citizen applies to lift the self-prohibition, allowing them time to reconsider their decision. This measure is intended to help individuals avoid hasty choices that may lead to further financial risk.
Public Sentiment and Expert Opinions
According to a survey by the financial marketplace 'Sravni,' over 52% of Russians expressed readiness to impose a complete ban on themselves regarding loans, primarily out of concern for potential fraud. Experts believe that the self-prohibition mechanism, coupled with the cooling-off period, could significantly reduce the risks associated with loan fraud, particularly from MFOs that often have lax verification processes. Legal professionals have noted that this law could serve as a strong deterrent against fraudulent loan applications, similar to prior regulations that reduced real estate fraud.
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