Bank of Russia proposes self-restrictions on loans to counter fraud

Using the new mechanism, people will be secured in a situation when a fraudster tries to take out a loan in their name. For this, it is necessary to set a special ban in one’s credit history.

The new mechanism will reduce the risk of malefactors’ access to leaked personal data, including copies of people’s passports, logins, passwords, etc. To implement this mechanism, the Bank of Russia has prepared the necessary legislative initiatives and sent them for interagency coordination.

‘Before issuing loans, banks and microfinance organisations (MFOs) will need to check if there are self-restrictions in the borrower’s credit history. And if a lender gives out the money despite the existing self-restriction, such institution will not be allowed to demand debt repayment,’ said Mikhail Mamuta, Head of the Bank of Russia Service for Consumer Protection and Financial Inclusion.

It is expected that there may be various restrictions, including by the type of a lender (a bank or an MFO), the way of application (remotely or in the office), as well as restrictions on all or certain types of loans and microloans.

‘People will be able to set and withdraw such restrictions free of charge as often as they like, depending on their life circumstances. It is enough to apply to any qualified credit history bureau (including via the Public Services Portal), a bank, or an MFO,’ said Aleksey Lukovnikov, Director of the Bank of Russia Data Governance Department.

All conditions of the operation of this mechanism will be stipulated in the relevant regulation of the Bank of Russia.