Parliament passes law governing dividend payments
Starting March 1, 2026, Russia will introduce new norms for installment plans aimed at enhancing consumer protection and promoting market integrity. The key provisions of the new regulations are as follows:
- Shortened Credit Terms: The maximum allowed installment payment period will be reduced to six months from 2026, further shortening to four months from 2028. This move aims to reduce risks linked to long-term insolvency, particularly in real estate purchases.
- Ban on Hidden Fees and Price Discrimination: Sellers are prohibited from charging different prices for goods paid immediately versus in installments, eliminating disguised overpayments.
- Limited Penalties: Penalties for late payments are capped at 20% per annum on the amount owed, and customers may repay installments early without fees.
- Debt Burden Control and Credit Transparency: If total installment obligations exceed 50,000 rubles, the data must be sent to credit bureaus (BKI), helping banks better assess lending risks.
- Operator Requirements: Companies offering installment plans must be registered in the Central Bank of Russia’s registry and have a minimum capital of 5 million rubles. Illegal operators will be excluded from the market.
These provisions collectively aim to enhance consumer protection by shortening credit terms, regulating fees and penalties, and improving transparency and market integrity.
Other notable aspects of the new regulations include:
- Operator Registration: Installment service operators must be legal entities.
- Oversight by the Bank of Russia: The Bank of Russia will oversee the activities of installment plan operators and maintain the registry of these operators.
- Maximum Duration: The new norms restrict installment plans to a maximum duration of six months.
- Reporting Requirements: The Bank of Russia will collect reports from installment plan operators.
- Limit on Unregistered Plans: The total amount of unregistered installment plans is limited to 50,000 rubles.
- Microfinance Organizations: Microfinance organizations are the only entities allowed to issue loans among installment plan operators, according to their charters.
The bill, which has received a positive government assessment and passed through the State Duma, is currently being sent to the president for signature. The installment plan regulations are expected to come into force on March 1, 2026.
It's worth noting that while the bill does not specify any changes to the maximum duration or total amount limits for installment plans, larger installment plans can be offered, but such transactions require sharing information with the client's credit bureau. This is an important step towards ensuring that banks can accurately assess lending risks associated with larger installment plans.
These new regulations mark a significant step forward in consumer protection and market integrity in Russia. By promoting transparency, regulating fees and penalties, and shortening credit terms, the new norms aim to create a more secure and fair environment for consumers and businesses alike.
The new regulations in Russia's economy target the industry of banking-and-insurance, as they specifically address installment plans, with the intention of bolstering consumer protection and industry standard practices. Furthermore, these fiscal measures seek to foster financial transparency and market integrity by limiting hidden fees, regulating penalties, and shortening credit terms.
