Bank of Russia recommends that banks restructure loans to companies and individual entrepreneurs
The regulator recommended that banks meet the needs of corporate borrowers facing temporary hardships by restructuring their loans.
To reduce regulatory costs for banks and borrowers, the Bank of Russia has temporarily eased the requirements for provisioning for restructured loans. The easing applies if the bank and the borrower assess the probability of restoring the latter’s financial position as significant.
Such borrowers include companies and individual entrepreneurs whose debt burden is not very high if they have been properly servicing their debts over the past six months and have provided the bank with a realistic business plan for the next three years. Banks in turn will regularly check whether the borrowers’ actual performance corresponds to the control metrics and will have to make additional provisions in the event of any deviations.