Taking Control: The Self-Imposed Credit Ban in Russia
Central Bank sketch of individuals placing self-imposed credit restrictions
Starting March 1, 2025, a self-imposed credit ban mechanism comes into effect in Russia, empowering citizens to shield themselves from fraudsters. This tool helps combat credit fraudsters who may apply for loans using fake documents or exert psychological pressure to secure loans. The Bank of Russia has analyzed statistics and crafted a profile of the average user of this service.
- Flexibility in Application: Every citizen can freely enable or disable the self-ban multiple times at their discretion. Applications can be made via the "Gosuslugi" portal or (in the near future) through MFC.
- Coverage: The service is accessible to all, including those with no credit history thus far. Once the application is submitted, credit bureaus form and update the applicant's credit history, including any self-ban details.
Analyzing the initial results of the mechanism, the Bank of Russia paints the average user profile as follows:
- Approximately 44% of individuals establishing a self-ban had no active credit obligations at the time of activation.
- Around 26% of individuals have never taken credit and opted for a comprehensive self-ban on credit application.
- Fewer than 1% of individuals with microloans from microfinance organizations took advantage of the new tool.
- Around 90% of individuals who previously taken microloans chose a comprehensive self-ban on credit acquisition.
Sergei Zhuravlev, the Head of the Bank of Russia's Krasnoyarsk Office, shared insights on the new tool, stating that it helps fight against fraudsters who obtain loans using false documents or manipulate people into taking loans. Any citizen can now block the possibility of receiving credit in their name.
"To be clear, the ban can vary. For example, it may apply only to banks or microfinance organizations. It may also concern loans accepted through the bank office or remotely, or both. The self-ban affects loans where fraudulent activity is most likely. According to the law, the ban does not apply to mortgages, auto loans secured by a vehicle, or primary education loans, since the risks of fraud in these types of loans are minimal. The self-ban does not affect existing loans, credit cards, unless the credit card has already been activated."
After submitting a request to lift the self-ban, changes take effect the following day, providing individuals an opportunity to reconsider their decision and avoid impulsive actions. Banks and MFOs are mandated to verify a potential borrower's credit history before issuing a loan. If a self-ban is in place, the lender must refuse to approve the loan. In cases of legal violation, the lender will not be able to demand repayment according to the contract.
[1] Bank of Russia
[2] MFC
[3] Gosuslugi
[4] Transparent Russia Foundation
- A significant portion of individuals who have activated the self-imposed credit ban, as revealed by the Bank of Russia, had no active credit obligations at the time of activation, amounting to approximately 44%.
- Ulindividuals with no prior credit history can also take advantage of the self-ban mechanism, with around 26% of individuals in this category choosing comprehensive self-bans on credit application.
- The industry of microfinance organizations has been affected by the new self-ban tool, as fewer than 1% of individuals with microloans from these organizations have used the service.
- Sergei Zhuravlev, the Head of the Bank of Russia's Krasnoyarsk Office, commented that the self-ban mechanism helps limit fraudsters who use false documents or psychological manipulation to obtain loans, and any citizen can now block the possibility of receiving credit in their name.
- The self-ban does not affect existing loans or credit cards, unless the credit card has already been activated, and banks are obliged to verify a potential borrower's credit history, including self-ban details, before issuing a loan.
