Banks urged to help borrowers before payments fall overdue
Borrowers in financial difficulty need direct support from banks before missing payments, the Bank of Russia says. It recommends repayment relief and dedicated contact channels to reduce reliance on unfair debt relief intermediaries.
Relief before missed payments
The Bank of Russia recommends that banks offer struggling borrowers options tailored to their circumstances rather than wait until payments become overdue.
Possible measures include reducing penalties or deferring principal repayments or interest payments, in full or in part.
Support can also cover borrowers who remain current on their loans but face precarious finances.
Banks are advised to help clients who, according to their records, plan to seek debt relief services.
The regulator also recommends a dedicated telephone number or email address so borrowers can discuss solutions directly with bank employees, taking account of their personal circumstances.
Debt promises can worsen distress
The recommendations aim to help borrowers overcome repayment difficulties with bank support rather than turn to unfair intermediaries.
So-called debt relief companies may promise to write off all debts or preserve all assets in bankruptcy, raising clients' expectations.
The Bank of Russia says these promises generally go unfulfilled.
Some intermediaries also recommend actions that worsen borrowers' position, such as ignoring loan payments.
Direct help, not guaranteed write-offs
The recommendations put early contact with borrowers at the center of bank support.
They set out repayment relief options rather than promise blanket debt cancellation.
The stated aim is to resolve financial difficulties without unfair intermediaries.