The Central Bank thought about supporting bank customers in the border regions: what measures have been agreed

Nabiullina spoke about the expected increase in the key rate and the full recovery of the economy

The main intrigue of the press conference of Elvira Nabiullina, Chairman of the Bank of Russia, after the Board of Directors left the key rate regulator unchanged for the sixth time in a row, was to try to unravel its further intentions. The market was interested in the question why the Central Bank of the Russian Federation expects the economy to recover and, judging by the signals, it can tighten its policy, that is, raise the key rate, which will inevitably lead to an increase in the cost of credit. However, the range of issues discussed turned out to be much broader than strategic topics. About how the authorities take care of the residents of the border regions of Russia and whether the regulator will go “on the Chinese path” – in the material “MK”.

The Bank of Russia looks to the future with reasonable optimism. Such a conclusion can be drawn from his forecast for 2024. According to the head of the Central Bank of the Russian Federation, by this moment the Russian economy will have fully returned to pre-crisis levels, and “in some industries, output has already returned to the levels of the end of 2021.” At the same time, the regulator allowed the key rate to be increased already at the next meeting in July, adding the traditional saying that “everything will depend on the incoming data.” Here, the market traditionally raises the question that if the economy is recovering, then why raise the key rate, which will make the loan more expensive, and therefore less affordable for business, which will slow down this very recovery. What is the traditional indication of inflation from the Bank of Russia. Such veiled claims were made this time as well. The journalists noted that the government often criticizes the Central Bank of the Russian Federation – supposedly the regulator could contribute more to the development of business activity. To this, Elvira Nabiullina resolutely stated that the regulator contributes to a balanced growth of the economy, and does not slow it down. “We are not slowing down, but on the contrary, we are promoting economic growth, sustainable, balanced growth, because without solving the issue of price stability, the economy will be thrown either into heat or into cold,” the head of the Central Bank explained.

In continuation of the question about the quality of the joint work of the “powerful of this world”, the journalists asked if the regulator’s priorities had changed, if he had gone along the “Chinese path”, when closer interaction with the government implies its stronger influence on the decisions made by the regulator. The Chairman of the Central Bank of the Russian Federation explained that the strategy of the Bank of Russia remained the same, but now the regulator has simply become more likely to “synchronize watches” with the Cabinet. However, all decisions on monetary policy, including setting the key rate, are taken independently.

The geopolitical events taking place with the participation of Russia this time were unexpectedly reflected in the course of the communication of the head of the regulator with the press. Recall that several important announcements were made the day before. Firstly, the governor of the Belgorod region, Vyacheslav Gladkov, said that residents of the border areas of the region, who were temporarily resettled due to shelling, would be given credit holidays. He clarified that the local authorities have already coordinated the appropriate measure with the Central Bank.

Secondly, against this background, the Association of Russian Banks (ARB) took the initiative to the regulator and asked to amend the law “On Consumer Credit”, expanding the rules for granting credit holidays to borrowers who find themselves in emergency circumstances – and specifically, adding such an opportunity for persons who suffered from terrorist attacks or were temporarily displaced, that is, refugees.

The Central Bank supported this idea. “Our policy is to provide credit holidays in such cases,” Nabiullina explained. “We understand that borrowers who were forced to leave the border areas and, as a result, lost their income, in our opinion, they can apply to their lender – these are both banks and microfinance organizations – with a request to change the terms of the loan or loan agreement.” . A similar topic arose with regard to life, health and property insurance of people who found themselves in “difficult life circumstances” due to the increased sabotage and terrorist attacks in the border areas. As the head of the Central Bank of the Russian Federation noted, it is very important to provide the residents of these territories with such opportunities. “Given that market participants are now overestimating these insurance risks, we are discussing with them what needs to be done to provide these basic financial services to residents,” she said. “We will take action as necessary. If market insurance turns out to be quite expensive, then there will be a necessary measure of state support, we will discuss with the government what measures may be required here.”

The regulator is also closely watching what is happening in the lending sector. In particular, the Bank of Russia was concerned about low marketing rates on loans for individuals. Recently, cases have become more frequent when financial institutions lure clients to their place at “low rates” of 3-4% per annum. The catch here is that such a rate will be valid for the first few months of servicing the debt, and then, according to the contract, it will rise sharply for the client, and above the average market level. At the same time, in agreements on “unpleasant changes”, rates are usually written in smaller print, and the client may even forget that the full cost of the loan will be much higher than usual. “Low rates in the initial period are advertised in large letters that are visible to everyone, understandable, and how this rate increases is in very small small print, and people may not even see it,” the head of the Bank of Russia admitted that there was a problem. “This issue worries us, as well as the antimonopoly service, and we recommended that banks indicate the conditions for changing rates on their websites and display these parameters no less noticeably than these low rates.” Nabiullina stressed that the Central Bank of the Russian Federation monitors exactly how banks promote their loan products, and the Federal Antimonopoly Service will be ready to apply its tools to violators.