Loan history of Russians to no longer be a mystery

Loan history of Russians to no longer be a mystery

The banking community under the auspices of the 'Russia' association sent a letter to the Russian Central Bank with a request to cancel a consent of the Russians to a request to loan bureaus in some cases.

"The bank may consider such a possibility if bankers provide reasonable arguments," RIA Novosti cited the Deputy Chief of Russia’s Central Bank, Mikhail Sukhov, as saying. He added that "to a great extent, obtaining the permission of the borrower has become a formality."

According to media reports, Russian banks have proposed to amend the law 'On loan history' in order to make a consent to a request to the loan bureau indefinite. Currently, it is valid within a period of two months from the moment of receipt or till the end of granting a loan if issued.

The banking community insists on the need to cancel a consent to the request a loan history for those citizens who have already been added to a bank's base.

The head of the department of Economics and Finance at the Faculty of Economics and Social Sciences of RANEPA, doctor of economic sciences, Professor Alla Dvoretskaya, speaking with a correspondent of Vestnik Kavkaza, drew attention to possible consequences of the abolition of the Russians' consent to disclose their loan histories.

"Open loan histories can lead to client over-indebtedness. On the one hand, now banks do not issue a loan in case of a client's refusal to such a request, on the other hand, loan histories must be revealed after a loan request. However, the one who does not want to receive a loan proposal from a bank must be protected from the imposition of loans – and if this initiative is supported, perhaps, banks will put pressure on the citizens with their loan proposals more actively," she said.

"Many of our citizens are in debt bondage, therefore, too active disclosure can be not completely relevant. Of course, it will be easier for banks to assess clients' ability to pay having having their loan histories without their consents. That is, the risks for banks will be reduced. Overall, I prefer greater transparency and more timely access to data," Alla Dvoretskaya concluded.

A researcher at the Center for Study of Structural Studies of the Institute of Applied Economic Researches of RANEPA, Mikhail Khromov, agreed that an open loan history of clients will be used by banks to solicit services. "And it is illegal. Advertising is one thing and targeted appeals is quite another matter. There should not be a situation when 500 banks, knowing that I am a good borrower, send me 500 loan proposals. This is contrary to the law that personal information shall not be disclosed," he said.

"The proposal to make a request to loan bureaus of indefinite duration, in the case of a cetain bank is realizable. Then a client stays its client and it can be an acceptable practice. But we need to consider how it really fits in with the law on the distribution of personal data. It is important that any bank could not access a loan history of any citizen at any time," Mikhail Khromov concluded.