Russia's Central Bank and Finance Ministry Propose Comprehensive Debt Regulation
In a significant move aimed at alleviating the financial burden on citizens, the Central Bank and the Ministry of Finance of Russia are drafting a law to comprehensively regulate citizens' debt. This initiative, announced by Alexey Chirkov, head of the regulation department at the Central Bank, follows instructions from President Vladimir Putin. The proposed legislation could be presented to the State Duma during the autumn session, marking a pivotal step in addressing the growing debt crisis among Russian borrowers.
The draft law mandates that creditors inform clients of their debts and offer a comprehensive solution before resorting to court actions. This process, which will last no longer than 30 days, will temporarily halt any forcible collection of funds from borrowers. The comprehensive settlement can be facilitated by banks, microfinance organizations, and professional collection agencies. Chirkov emphasized that this approach aims to simplify the process for borrowers struggling with debts, allowing them to negotiate with multiple creditors through a single application.
Addressing the Debt Crisis: A Systematic Approach
Experts from financial marketplace Sravni have highlighted that many Russians face multiple debts, often leading to confusion and financial strain. The Central Bank's proposal comes in response to the common practice where individuals take loans from different banks, making it difficult to manage payments effectively. In many cases, borrowers prioritize mortgage payments while neglecting consumer loans, leading to a cycle of debt and potential bankruptcy.
The proposed comprehensive settlement mechanism seeks to provide a more civilized and systematic approach to debt resolution. According to Anatoly Aksakov, head of the State Duma Committee on Financial Markets, the current debt landscape is fraught with competition among creditors, resulting in aggressive collection practices that exacerbate borrowers' stress. The new legislation aims to create a framework where all creditors collaborate to develop a manageable debt repayment plan for borrowers.
Maxim Kolyadov from Insurance Broker AMsec24 noted that the comprehensive settlement initiative is designed to protect borrowers' rights and offer them viable options for debt repayment, including restructuring or potential partial write-offs. By establishing a clear timeline for debt negotiations, the initiative seeks to reduce the anxiety faced by borrowers and ensure a more transparent process for managing debt.
