The total amount of money Russians owe to banks will rise to 10 trillion rubles ($300 billion) by the end of this year, a Russian newspaper reported Friday citing the central bank.
A boom in consumer lending in Russia this year has sparked concern that the market may be overheating, with officials warning of possible financial volatility if the trend is not checked.
Almost half of the 10 trillion rubles owed to banks is unsecured consumer borrowing, the head of the financial regulator’s bank regulation department Vasily Pozdyshev told Vedomosti business daily.
The amount of retail credit in Russia has increased 24.3 percent this year, according to the newspaper.
Despite Russia’s slowing economy, the central bank is currently seeking to reduce more risky borrowing practices, including a move to cap loans issued at a high rate of interest.
“Consumer lending may become not so much an engine of growth as a threat to financial stability,” the Bank of Russia chairwoman Elvira Nabiullina told Russian lawmakers last week, according to a transcript on the regulator’s website.