Debt service-to-income ratio

Credit institutions and microfinance organisations are obliged to calculate DSTI starting from 1 October 2019. The procedure for DSTI calculation by credit institutions and microfinance organisations was initially established as from 1 October 2019.

On 1 January 2024, Federal Law No. 601-FZ, dated 29 December 2022, ‘On Amending the Federal Law ‘On Consumer Loans (Microloans)’ became effective, obliging credit institutions and microfinance organisations to calculate DSTI and inform borrowers of existing risks in writing if their DSTI exceeds 50%. Pursuant to this law, starting from 1 January 2024, the procedure for DSTI calculation by credit institutions and microfinance organisations is regulated by a single document, namely Bank of Russia Ordinance No. 6579-U, dated 16 October 2023.

DSTI calculation method for credit institutions and microfinance organisations

A credit institution or a microfinance organisation should calculate DSTI as the ratio of the sum of the borrower’s average monthly payments on all loans and microloans, including a newly issued loan (microloan), to the amount of the borrower’s average monthly income according to the formula:

where:

∑AvMP is the sum of the borrower’s average monthly payments on all loans and microloans; and

AvMI is the amount of the borrower’s average monthly income.

A credit institution or a microfinance organisation must calculate DSTI when making a decision on issuing a loan (microloan) to an individual for purposes not related to the borrower’s business, irrespective of the amount of the loan (microloan), as well as when making decisions on:

• increasing the amount of the average monthly payment on a loan (microloan), except for a loan (microloan) with a credit limit;
• raising the credit limit on a loan (microloan) with a credit limit; and
• extending the term of a loan (microloan) agreement with a credit limit.

Furthermore, a credit institution or a microfinance organisation must make a new DSTI calculation:

• if more than 31 calendar days have passed between the date of the DSTI calculation made when deciding to issue a loan (microloan) and the date of concluding the loan (microloan) agreement for which DSTI was calculated;
• if more than 31 calendar days have passed between the date of the DSTI calculation made when deciding to raise the credit limit on a loan (microloan) with a credit limit and the date of the borrower’s acceptance of the offer to raise the credit limit for which DSTI was calculated; or
• if the loan (microloan) for which DSTI was calculated was provided to the borrower for the purposes of refinancing another loan (microloan) or other loans (microloans) and this loan (microloan) was not used by the borrower for the stated purposes within 60 calendar days from the date of its issuance.

However, a credit institution or a microfinance organisation is not required to calculate DSTI (including repeatedly) when:

• making decisions on increasing the amount of the average monthly payment on a loan (microloan) (except for a loan (microloan) with a credit limit) if this decision is due to the occurrence of an event specified in the terms of the loan (microloan) agreement in force as of the date of its conclusion;
• issuing government-subsidised education loans pursuant to the procedure established by Federal Law No. 273-FZ, dated 29 December 2012, ‘On Education in the Russian Federation’;
• issuing loans (microloans) to an individual recognised as a person with disabilities to purchase technical rehabilitation aids and/or to pay for services, provided that the conditions stipulated in Part 7 of Article 5¹ of Federal Law No. 353-FZ, dated 21 December 2013, ‘On Consumer Loans (Microloans)’ are met;
• issuing loans (microloans) in accordance with Federal Law No. 117-FZ, dated 20 August 2004, ‘On the Savings and Mortgage System of Housing Provision for Servicemen’; and
• revising a loan (microloan) agreement, as requested by a borrower, so as to suspend the fulfilment of the borrower’s obligations or reduce the amount of the borrower’s payments for a period specified by the borrower, in accordance with Article 6^1-1 of Federal Law No. 353-FZ, dated 21 December 2013, ‘On Consumer Loans (Microloans)’ or other federal laws.

Sources of information for calculating the average monthly payment (the numerator of DSTI)

Average monthly payments on loans (microloans) are calculated based on the following:

• data on average monthly payments received from all qualified credit history bureaus (hereinafter, data from qualified CHBs); and
• other documented information recognised by a credit institution or a microfinance organisation as reliable and up-to-date (in cases where data from qualified CHBs is deemed to be unreliable and/or outdated, or if a borrower has not given consent to requesting data from qualified CHBs).

Sources of information for calculating the average monthly income (the denominator of DSTI)

Bank of Russia Ordinance No. 6579-U sets out two approaches that may be used to calculate a borrower’s average monthly income: a standard approach (for credit institutions and microfinance organisations) and a model-based approach (for credit institutions only).

When calculating borrowers’ average monthly income using the standard approach, to verify their income, a credit institution or a microfinance organisation may use, depending on the priority established in its internal documents governing the DSTI calculation procedure, the following sources:

• Official documents confirming the borrower’s income, an indicative list of which is provided in Annex 1 to Bank of Russia Ordinance No. 6579-U (hereinafter, the Indicative List).

For example, a personal income tax return, a salary certificate issued by the borrower’s employer, a statement of the insured person’s individual account in the mandatory pension insurance system, and other official documents.

• CHBs’ credit reports (applicable until 1 July 2025).
• The size of income stated by the borrower in the loan application or another document not included in the Indicative List.

If a credit institution or a microfinance organisation uses one or more documents that are not on the Indicative List (including a loan (microloan) application signed by a borrower) when calculating the borrower’s average monthly income based on the standard approach, it must not use any other data on the borrower’s income. The calculation of a borrower’s average monthly income should include the smaller of the following values:

• the size of income calculated based on the documents not specified in the Indicative List; or
• arithmetic mean of the average per capita income in the region where the borrower is registered at the place of his/her stay in the Russian Federation or at the place of his/her residence, calculated for four quarters based on the recent information on the average per capita income published on Rosstat’s official website.

Furthermore, through 31 December 2025, if a credit institution or a microfinance organisation, when calculating a borrower’s average monthly income to decide on a loan (microloan) in an amount (including credit limits) of less than ₽50,000 or a loan (microloan) to purchase a motor vehicle, secured by the vehicle being purchased, uses methods to evaluate the borrower’s creditworthiness, then the income to be included in the DSTI calculation is the amount stated by the borrower in the signed application for the said loan (microloan), reduced by the credit institution or the microfinance organisation in accordance with the said evaluation methods.

When using the model-based approach to calculate the amount of a borrower’s average monthly income, credit institutions may also rely on their internal models to determine borrowers’ DSTI more accurately. These models are subject to the Bank of Russia’s approval.

The ordinances, information letters, consultations papers as well as methodological recommendations for credit institutions are available in Russian only.