Cases of issuing microloans as bank loans revealed
Through their remote channels, banks offer individuals to borrow funds while providing no information about the type of the agreement to be signed and the contracting party. Consumers are thus unaware whether they will sign an agreement with a bank or its subsidiary microfinance organisation. Banks either provide no data about this or fail to inform consumers clearly enough.
Consequently, customers frequently do not understand whether they have raised a loan or a microloan and on what terms. Thus, banks actually missell a product, which undermines confidence in the financial market.
The Bank of Russia revealed six credit institutions, including two systemically important ones, involved in these practices. The regulator has demanded that the banks change their approaches to information provision within the established period.