Russian banks abandon companies and individuals on their loan applications

Central Bank Governor Elvira Nabiullina

Russian banks have been slow in approving loans to help individuals and companies struggling during the naval virus pandemic.

Central Bank Governor Elvira Nabiullina said Friday take-up of cheap loans and repayment holidays for wretched companies and individuals had got off to a “slow” start, emphasizing that the Central Bank expects banks to improve approval rates for those applying under government-backed initiatives.

The Central Bank said 900 companies have applied for a total of 6 billion rubles ($81 million) in interest-free loans to cover staff salaries, in a scheme where the government would subsidize banks to cover the cost of cheap lending. 

” The system is moving very slowly. This cannot satisfy us and does not correspond to the severity of the problem, so we will work with banks to make this mechanism work,” said Nabiullina in a press conference Friday.

Russia’s largest banks have also rejected 85% of applications from borrowers seeking an emergency loan restructure.