Limitation on cash loans in 2023 as well.

The Central Bank (CBCG) has decided to extend in the coming year the measure related to the approval of unsecured cash loans to citizens, which has been in effect since January 2020.

The supreme monetary institution announced yesterday that the CBCG Council adopted changes to the decision related to this measure.

When the restriction of these loans came into force, it was planned that this measure would be valid for two years, but the analysis of trends in unsecured cash loans at the end of October last year showed that the measure should be extended with some correction.

"The analysis showed that as a result of this measure, in a period of two years, total cash loans decreased by 15,38 percent, which resulted in a decrease in the share of this type of loan in total gross loans from 25,25 percent as of the end of December 2019. to 20,29 percent at the end of October last year. When it comes to the share of cash unsecured loans in total gross loans with a remaining repayment period of over six years for the observed period, a drop of 2,29 percentage points is recorded, and for loans over eight years, the drop amounts to 3,11 percentage points. The analysis showed that the three banks in the system still have the total amount of cash non-purpose unsecured loans and loans secured by a promissory note with a remaining repayment term of more than six years, greater than 50 percent of the bank's own funds," the CBCG explained to "Vijesta" earlier. .

The supreme monetary institution said that this measure has yielded results, but the risk of concentration of cash unsecured loans in total loans, as well as their amount in relation to the level of own funds at individual banks, still requires an extension of its application in a modified form.

"The amendments enable all banks that have a level of bad loans (NPL) in this segment of loans below the defined level, to be able to approve cash loans or contract an extension of the repayment term from the basic contract with terms longer than the terms defined by the decision by two years. In this way, banks are given an incentive to improve the practice of loan approval and collection, so that they can extend the deadlines for loan approval to clients for an additional two years. The consequence of this measure is that certain banks can approve unsecured cash loans with a maturity of up to ten years," said the CBCG.