From January 1 to March 31, 2025, the Bank of Russia will abolish the limit on the total cost of credit (FCC) for credit cards. The corresponding decision was made by the board of directors of the regulator, it says in a post on his website.
The Central Bank will abolish the limit on the full cost of a loan on credit cards
Author: Timur Batyrov
According to it, the PSC limit is now 292% per annum or 1/3 of the excess over the market average two quarters earlier. The restriction will remain for other types of loans, except for mortgages, as well as all loans from microfinance organizations, consumer credit cooperatives and pawnshops.
The Central Bank made the decision to cancel the limit due to incorrect calculation of the PSC for credit cards by a number of large banks, as a result of which the average market value of the PSC for the third quarter of 2024 turned out to be underestimated. Since the maximum level of PSC for the first quarter of 2025 depends on this value, “the limitation could lead to a reduction in the availability of cards for citizens,” the Central Bank explained.
In October, the regulator required banks to calculate the full cost of the loan based on the maximum possible amount of payments by the borrower. The Central Bank said that some banks offer a promotional period for credit cards with minimum rates, which then increase significantly. At the same time, they calculate the PIC based on the rates in force during the grace period.
“This calculation of the PSC contradicts the provisions of the law “On Consumer Credit (Loan)”, misleads borrowers and the lender should determine the full cost of the loan based on the maximum payments of the borrower that are valid outside the promotional period,” the Bank of Russia said.
The Central Bank informed banks about the inadmissibility of such practices, sent them instructions on the need to eliminate violations and switch to the correct methodology for calculating the PIC.
Cover photo: Peter Dazeley/Getty Images
Source: rb.ru
