The Central Bank of Russia approved revised macroprudential risk-weight add-ons under its updated framework, reducing the add-ons applied to credit card debt during the grace period and linking them to borrowers’ debt service-to-income ratio (DSTI), while leaving add-ons for other assets unchanged. The recalibration reflects banks’ data showing grace-period credit card balances have default rates two to three times lower than balances after the grace period. For credit cards originated from 1 February 2025, the add-on on outstanding grace-period balances will be 0.2 for DSTI up to 50%, increasing to 0.5 at 50–60%, 1.0 at 60–70%, 1.5 at 70–80%, and 2.0 for DSTI above 80%; an add-on of 2.0 also applies where no DSTI is available or where DSTI is not calculated. Balances after the end of the grace period will continue to be set under the add-on matrix effective from 2 December 2024. The central bank estimates the average grace-period add-on at 0.7, with such balances representing around one third to one half of large banks’ total credit card debt, and expects the macroprudential capital buffer for unsecured consumer loans to keep accumulating as portfolios renew (buffer size as of 1 December 2024: RUB 0.8 trillion, 6% of the portfolio).
Central Bank of Russia 2025-01-29
Central Bank of Russia lowers macroprudential risk-weight add-ons for credit card grace-period balances from 1 February 2025
The Central Bank of Russia revised macroprudential risk-weight add-ons, reducing those for credit card debt during the grace period and linking them to borrowers' debt service-to-income ratio (DSTI). The new add-ons range from 0.2 for DSTI up to 50% to 2.0 for DSTI above 80% or where DSTI is unavailable. This recalibration reflects lower default rates for grace-period balances and aims to maintain the macroprudential capital buffer for unsecured consumer loans.