Citizens will become closer to banks

A series of measures to tighten the conditions of unsecured lending to the population was interrupted by a mitigating step from the Central Bank. The regulator is ready to allow bankers to use their own models when calculating the client’s income to assess the debt burden. The current general methodology has a flaw: the borrower’s income is included only officially confirmed, however, banks have additional options for assessing solvency. From the middle of the year, bankers will be able to apply to the Central Bank to prove the correctness of their models, but so far this is available only to the largest players.

Already this year, banks will be able to begin the transition to their own model for assessing the client’s income (model approach) to calculate the debt burden indicator (LN), follows from the draft instruction of the Central Bank published on February 17. Banks will be able to send the first applications to the regulator from June. “This measure will increase the accuracy of PTI calculation and allow banks to more effectively comply with macroprudential requirements,” the Central Bank believes.

A more accurate calculation of PTI will have a mitigating effect on macroprudential limits (MPL, limit the share of high-risk loans), and through them on the issuance of loans, explains Mikhail Matovnikov, director of the Sberbank financial analytics center: “But will the transition to the model approach be able to increase issuance and by how much? It is still difficult to estimate, it will depend on demand.”

At the first stage, the Central Bank limited the number of banks that have the opportunity to switch to the new approach: from June, those whose consumer loan portfolio is equal to or exceeds 300 billion rubles, as well as those who have permission to use the IRR approach, will be able to submit models for validation. There are eight of them, according to the Central Bank. From April 2024, banks with a portfolio of more than 60 billion rubles will be able to make a model transition – there are twelve of them in the financial system of the Russian Federation. The limitation, says Yuri Belikov, managing director of Expert RA, can be explained by “labor and time costs associated with model validation.”

Now, when assessing the borrower’s income, you can only use information confirmed by various documents (for example, information from the Federal Tax Service, Rosstat, a certificate of employment, etc.). The Central Bank explained to Kommersant that banks do not always have the opportunity to obtain complete information: “People may have other incomes in addition to salaries, in addition, banks make loan decisions very quickly and do not waste time collecting certificates.”

If the borrower does not have a certificate of income or a salary account with a creditor bank, two simplified approaches to the assessment are possible, the Central Bank notes. The first is that income is determined at least from the amount declared by the borrower and the average regional per capita. The second is that income is determined on the basis of BKI data on payments made on all loans and borrowings over the past 24 months. “The disadvantage of these approaches is their accuracy. The error can be about 50%, income is often underestimated, ”the Central Bank admits.

As a result, adds one of the bankers, the PTI is overestimated, and from 2023 the Central Bank limits the share of loans with high PTI (above 80%). In his opinion, a more accurate calculation will allow “at least partially” to restore the declining dynamics of issuance.

The right to use a model approach is a long overdue issue, says Mikhail Matovnikov: “Such models can greatly increase the availability of loans. Advanced banks are already using the model approach to make credit decisions, but due to regulatory restrictions, a client sometimes has to be refused for formal reasons, even if there is reason to believe that he is creditworthy.” Borrowers who for some reason find it difficult to confirm their income with official documents will be able to get a loan, added Evgeny Ivanov, head of the retail risk department at PSB.

One of the main and useful sources of data is the ability to take into account the transactional activity of the client. “Sometimes clients spend consistently more than payroll credits per month. This gives us reason to assume that they have other sources of income, for example, from accounts in another bank, and this will also allow us to take into account the income of other family members, ”explains Mikhail Matovnikov. FBK partner Anastasia Terekhina expects that if the new version of the instruction comes into force, some of the clients who, due to the current conservative approach, left for MFIs, will be able to return to banks.

Olga Sherunkova