The Central Bank proposes to limit the rates on loans and borrowings to 1% per day. RBC writes about this with reference to the amendments prepared by the regulator to the laws “On Consumer Credit (Loan)” and “On Microfinance Activity and Microfinance Organizations”.

The proposed measures are aimed at improving the protection of consumer services of microfinance organizations.

According to RBC, 95-97% of Russian microfinance organizations provide loans at interest rates over 365%. Now the Law on Microfinance Activities and Microfinance Organizations limits the collection of interest and penalties when their total amount exceeds the three-times amount of the loan.

Earlier it was reported that Sberbank of Russia had increased the minimum rates on consumer loans by one or two percentage points. On September 14 the Central Bank of Russia raised the key rate from 7.25% to 7.5% per annum. The board of directors of the regulator decided to tighten monetary policy for the first time in almost three and a half years.

Restrictions should come into force on July 1, 2019. In the period from the adoption of the law to this date, the limit will be set at 1.5% per day.

Details here

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