Bank of Russia to limit over-indebtedness of large companies
21 November 2024
News
The regulator is planning to set macroprudential add-ons for banks with respect to new loans and bonds of large heavily indebted corporate borrowers. The criteria for classifying companies into this category are proposed in the draft new version of Bank of Russia Ordinance No.
Borrowers whose gross debt exceeds 2% of the banking sector’s capital will be deemed large, and those with an interest coverage ratio of less than 3.0 will be considered heavily indebted.
The add-ons will apply if both of the above criteria are met and the total debt of a borrower and its related parties to a bank is over ₽100 billion. These measures will help limit the over-indebtedness of large companies and banks’ credit risks.
Preview photo: Andrii Yalanskyi / Shutterstock / Fotodom