25.09.2024, 09:59
Banks will be limited the opportunity to earn money from Russians
Source: OREANDA-NEWS
OREANDA-NEWS Starting from October 1, Russia will tighten the conditions for concluding life insurance contracts. This measure will limit banks' ability to earn money from citizens, said Meri Valishvili, Associate Professor of the Department of State and Municipal Finance at Plekhanov Russian University of Economics, RIA Novosti quoted her as saying.
Investment and cumulative life insurance are designed for qualified investors who are aware of all the pros and cons of using them, but financially illiterate Russians often become victims of unfair sales. As noted in the Central Bank, over 1.1 million people purchased voluntary life insurance policies last year.
"As a rule, it is life insurance that is becoming the most common practice of misseling, that is, unfair sales by banks, which instead of standard and safe instruments promote more profitable, but also more risky ones," Valishvili explained.
Due to the trend in Russia, it will be prohibited to impose such insurance on unqualified investors with rare exceptions. Also, starting from April 1, 2024, companies have no right to refuse payments of investment income in the absence of an insurance contract. Thanks to these measures, it will be almost impossible to include conditions favorable for the bank, but not for the client, in the policy.
Banks practice a scheme in which insurance or other offers are required to obtain a loan. It is difficult and time-consuming to verify the validity of such claims, which complicates the process of obtaining a loan. Fines are proposed to combat such actions, but banks can increase fees for banking services and transactions or promote digital products and services that will help increase revenues.
The State Duma also discussed tougher penalties for defrauding customers. They can grow tenfold and amount to 0.1 percent of the organization's capital. If the authorities take this step, financial institutions will raise loan rates, making them more expensive for consumers, warned Alexey Klyuyev, head of the Bankruptcy and Disputes practices at the law firm Bishenov&Partners.
Investment and cumulative life insurance are designed for qualified investors who are aware of all the pros and cons of using them, but financially illiterate Russians often become victims of unfair sales. As noted in the Central Bank, over 1.1 million people purchased voluntary life insurance policies last year.
"As a rule, it is life insurance that is becoming the most common practice of misseling, that is, unfair sales by banks, which instead of standard and safe instruments promote more profitable, but also more risky ones," Valishvili explained.
Due to the trend in Russia, it will be prohibited to impose such insurance on unqualified investors with rare exceptions. Also, starting from April 1, 2024, companies have no right to refuse payments of investment income in the absence of an insurance contract. Thanks to these measures, it will be almost impossible to include conditions favorable for the bank, but not for the client, in the policy.
Banks practice a scheme in which insurance or other offers are required to obtain a loan. It is difficult and time-consuming to verify the validity of such claims, which complicates the process of obtaining a loan. Fines are proposed to combat such actions, but banks can increase fees for banking services and transactions or promote digital products and services that will help increase revenues.
The State Duma also discussed tougher penalties for defrauding customers. They can grow tenfold and amount to 0.1 percent of the organization's capital. If the authorities take this step, financial institutions will raise loan rates, making them more expensive for consumers, warned Alexey Klyuyev, head of the Bankruptcy and Disputes practices at the law firm Bishenov&Partners.
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