Other Measures



Macroprudential Measures Related to Retail Loans Granted by Credit Institution 


At its meeting held on 28 December 2021, the CBCG Council adopted the Decision on Macroprudential Measures Related to Retail Loans Granted by Credit Institutions (OGM 138/21). This decision repealed the initial Decision on Macroprudential Measures Related to Retail Banking Loans (OGM 58/19 and 107/20) that had addressed the same issue.


The measures prescribed under the aforesaid decision aimed at establishing the sustainability of retail lending, in the context of preserving financial stability by the CBCG. Namely, in recent years, we have witnessed a notable growth in the amount of cash loans, their share in total loans, as well as the extension of maturities of these loans (see Box 3 in the Financial System Stability Report for 2018). As a rule, only bills of exchange and administrative bans were used as security for retail loans. The continuation of this trend could make credit institutions much more vulnerable in the event of an economic and financial crisis, which would directly affect borrowers' earnings and reduce their credit capacity, which would further affect credit institutions and possibly their willingness to extend loans and the terms and conditions of those loans. The aforesaid decision has been in effect as of 1 January 2022 with the initial one-year validity. Subsequent amendments extended the validity of the decision and the latest prescribes the validity of four years, so the measures will remain in effect until the end of 2025.


The decision introduces limitations concerning the maturity of retail cash loans that have not been adequately collateralised in the form of immovable and movable property or in any other way allowed under the decision. A credit institution whose amount of inadequately collateralised retail cash loans with a residual maturity of over six years exceeds 50% of its own funds may grant inadequately collateralised retail cash loans with a maturity of up to six years; if this amount does not exceed 50% of their own funds, the credit institution may grant inadequately collateralised retail cash loans with a maturity of up to eight years. Moreover, a credit institution whose share of non-performing cash loans in total inadequately collateralised loans with a contractual maturity over six years is below 3.5% may grant a 2-year extension of the inadequately collateralised retail cash loans with six-year and eight-year maturities. This would limit the maturity of retail cash loans that have not been adequately collateralised to six and/or eight and/or ten years, depending on the aforesaid conditions, while loans that have been granted against a proper collateral do not have any maturity limitation. All conditions and limitations for new loan maturities would apply equally to the residual maturity of the loans for which the originally contracted maturity extension has been agreed.