The Central Bank allowed the introduction of floating interest rates on loans for wealthy citizens

The Central Bank is considering the introduction of floating rates on loans for wealthy citizens, said the head of the regulator, Elvira Nabiullina. According to her, in this matter the Central Bank analyzes international experience and also discusses the boundaries of floating rates.

“We should consider introducing the possibility of floating rates for wealthy clients, very wealthy borrowers who have high incomes, if they want to take on interest rate risk, well, maybe it can be allowed, but for the majority of citizens, in my opinion, it is necessary to introduce restrictions,” Ms. Nabiullina said at a press conference (quoted from TASS).

In September 2023, Elvira Nabuillina stated that the Central Bank does not welcome the introduction of floating rates on loans to the population, since the amount paid may ultimately be more expensive than a loan with a fixed rate. The experience of 2022 with floating rates on loans for individuals, according to Ms. Nabiullina, showed that they need to be applied “very carefully.”

The State Duma is considering a bill proposing to set limits that will limit the percentage of changes in floating rates for microbusinesses. It is assumed that the rate can change by no more than 4%. Banks asked to soften some provisions of the bill.

Read more in the Kommersant article. “Variables are subtracted from loans.”