The Bank of Russia has published a draft order, which have softened some requirements for banks in terms of redundancy, and tightening that are available in the document may enter into force only next year. The draft vacation credit recognized restructuring. Experts point out that in this formulation, they may be increased reserves. However, the Central Bank noted that it will not worsen any credit history of the borrowers, no conditions of reservation for banks.Monday, July 13, the Bank of Russia has published a draft order on the procedure for formation by banks of reserves on possible losses on loans. The document was developed “in order to control approaches to the assessment of risks taken by credit institutions for loans, loan and similar debt” taking into account changes in the Budget code, as well as proposals of bankers and Supervisory practices.The draft amendments are aimed at easing some of the redundancy which was too hard, experts say. “In particular, the project sets the minimum amount (600 thousand rubles— Kommersant), which arises the need for reclassification in the third category of quality (loans with significant credit risk reserves up to 50%.— “B”), the loan, part of which was used to repay indebtedness to another Bank”,— said the Director for Bank ratings “Expert RA” Ludmila of Kozhekina. Previously to the reclassification resulted in any, even a very small amount of such payment at the expense of borrowed funds, which led to the unnecessary accrual of additional reserves. In addition, liquid will now be considered property, implementation period which is one year, while now the term is limited to nine months. “It will positively affect the possibility of reducing the reserves by providing,” she said.However, the document introduces and tightening, with effect from 1 April 2021. In particular, banks will have to classify loans on investments in authorized capital of legal entities is not higher than a third category of quality (the measure is aimed at limiting the financing of M&A transactions). “But there remains the opportunity to increase by no more than one notch, subject to satisfactory performance of the operating activities of the borrower and applied in this case, the mechanism of gradual formation of the reserve,” said Mrs. Kozhekina.The Director of financial institutions at Fitch Ratings Anton Lopatin notes that the draft guidelines include a provision according to which vacation credit recognized restructuring. “While vacation credit available until 1st of October, and banks can not create for such loans reserves, but at some time this concession will be cancelled. And then banks will have to create reserves for creditit goes on vacation, as restructured,” he said.However, as explained in Bank of Russia, this provision is introduced to clarify that the restructuring can be made not only by agreement but also in the framework of state programs. “The norm is constant, the loan will be recognized as restructured,” said the Central Bank, but pointed out that allowed banks not to charge additional provisions for such debts. These requirements are the same in regard to vacation within 106-FZ, and in relation to their own programs. In addition, said the Central Bank, in accordance with the law on credit vacation credit history of the borrower will see the details of the grace period. “The Bank of Russia at the beginning of April, recommended lenders, directing the information to the credit bureaus, to indicate the reason why a citizen got the right to a grace period, to subsequently, this information was not reflected negatively in the calculation of its credit rating. In cases when the Bank voluntarily went to meet the borrower, providing for the restructuring of the program, the controller also recommended not to take it into account as a factor deteriorating the reliability of the borrower,”— said the Central Bank.Maxim Builov
