Banks will be banned from collecting debts in new territories until 2026: who will have to pay

Will the costs fall on the shoulders of ordinary people?

The State Duma in the second reading adopted a bill temporarily prohibiting the collection of debts from residents of new Russian territories: the Donetsk and Lugansk People’s Republics, as well as the Kherson and Zaporozhye regions. Residents of these regions may not have to repay loans and borrowings previously taken from large banks or microfinance organizations. Experts consider such a decision to be unequivocally correct and expedient, but they are sure that the costs of covering the associated costs will still be taken from the people’s pocket.

The document, adopted by the State Duma in the second reading, temporarily does not allow creditors to collect debts from residents of four new regions of Russia that arose from September 30, 2022 to January 1, 2026. The legislative measure is aimed at protecting the rights and interests of Russian residents so that they can get used to the new economic situation: the transitional period of integration of new regions into the economic, financial, credit and legal systems of our country will not happen instantly, but will last for five to ten years. Ex-Deputy Minister of Labor Pavel Medvedev spoke about the details of the implemented measure.

– What preferences are included in the new law?

– New government measures are aimed at protecting the rights of residents of four new regions of Russia. The document will allow prohibiting, until January 1, 2026, activities to return their overdue debts for obligations that arose before September 30, 2022.

– What debts can be paid in installments, and which ones can not be repaid at all?

– The ban, according to existing information, will affect only the debt of ordinary people to professional creditors, including microfinance organizations. At the same time, such conditions do not apply to debts between individuals (whose bilateral claims are limited to 50 thousand rubles), as well as debts for housing and communal services and loans to individual entrepreneurs.

– Who will eventually pay off the debts?

– In some cases, money will have to be allocated from public funds; in others, state-owned banks, which have already gained experience in working in difficult geopolitical conditions and in new Russian territories, will bear the costs (it is possible that later these loans will be repaid again through budget interventions), it is possible that the financial costs will fall on the shoulders potential investors and borrowers: for the former, deposit rates will fall, for others (borrowing rates) they will increase.

So who will have to pay anyway?

– There are many ways to get away from direct repayment of obligations: installments or credit holidays that allow the borrower to reduce and even gradually get rid of debts. The problem is that in the end, someone will have to pay the price one way or another: only whether it will be a state that cannot find a common language between businessmen and government regulators; exporters and importers who do not always understand what assets should be paid attention to; or ordinary consumers, who are often guided by the cost of the product in the store, not trying to talk about future price movements in commodity markets. It may take several years to agree on financial positions, but obviously this time will not contribute to the economic viability of all the participants in the discussion.