The Board of Directors of the Bank of Russia approved a number of regulatory relief measures in the banking sector to support early recovery of the economy.
The first decision concerns the accelerated introduction of new methods of assessment of credit risk on the mortgage, which will free up about 300 billion rubles of Bank capital on the extension of mortgage lending.
The second is the stimulation of investment programs of the largest companies. We are creating more favorable conditions for the purchase of annuities. This is a temporary measure to increase the investment activity in the recovery period and the next few years. The risk ratio for investments in subordinated liabilities non-financial entities (including perpetual bonds) will be reduced from 150 to 100%.
Third, the incentives of banks to resolve problem loans through strategic organizations receive compensation from companies or collateral in the form of shares of these companies. In fact, this exchange of debt for equity. This is also a temporary exemption of two years to encourage such settlement. Many borrowers are now hard, the fall was deep, and to reduce the pressure of these problems on the real and financial sectors, we temporarily adopt this measure until mid-2022. The risk ratio for investments in shares of strategic companies received under such agreements on compensation or the Deposit will also be reduced from 150 to 100%.
With the same purpose, we move one year increase the risk for investment banks in the capital of nonfinancial organizations. This will encourage banks to support the real sector and give banks more time to reduce in the future the share of interest-bearing shares. We also carry raise the risk weights for defaulted debt for one year against original schedule to mitigate the period of the manifestations of overdue debts that would be inevitable, and the implementation of credit risk due to the pandemic.
Fourth, we are extending until the end of 2021 apply for a reduced coefficient of 70% for loans medical and pharmaceutical companies to support the development of this critical now segment, including the production of vaccines against coronavirus.
To make it more competitive on price our high-tech products for foreign buyers and thereby support the recovery of external demand, we have reduced the risk ratio from 20 to 0% on loans to non-oil exporters with coverage of EXIAR.
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