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President of Russia Dmitry Medvedev: Mr Ignatyev, I would like to recall the beginning of last year. It was a rather difficult time for us: we were quite concerned with the state of affairs in the banking sector, and citizens were naturally worried about the policies that banking institutions would adopt with regard to loan agreements. There was some tension in the market, as both of us know. Fortunately, we were able to resolve the problems before us through coordinated actions and efforts by the Government Cabinet and the Central Bank. The financial system is working normally, and overall, things are going well.

Nevertheless, we have prepared a law – which I signed today – intended to ease citizens’ concerns about the future of loan agreements they sign with banks, so that citizens do not find themselves at the mercy of bank policy and so that banks cannot change the rates and terms of these agreements at their own will.

Under this law, a bank cannot unilaterally change the term of a loan agreement, increase the interest rate on loan, or change any other significant conditions of the agreement except in cases specifically provided for by the law. This way, we make this area of banking services absolutely clear. Unless there is a special law, any such changes to loan agreements can only be made with the borrower’s consent. I see this as a very important guarantee. And while overall, things in this sector are going well, we are nevertheless introducing this kind of guarantees, which, in my view, will further improve the quality of banking services rendered to our citizens.

I would like you to follow the operation of this law, monitor the situation and the way it is enforced. If there are any questions or suggestions, we can take them into account in our subsequent legislative work.

Chairman of The Central Bank Sergei Ignatyev: That’s right, the law was drafted to serve the interests of borrowers – individuals – to prevent any possibility of abuse by banks. The law was drafted by State Duma deputies with our participation, and I think that we will carefully monitor its implementation for at least a year so that we can step in with appropriate amendments if anything happens.

Dmitry Medvedev: Ultimately, this serves as a guarantee for our citizens, who are generally a more vulnerable party to a contract with a bank. That’s the way it works all over the world with so-called public contracts when there is a strong party, whish is a business organisation, and a more vulnerable party, a citizen. I think it’s good that we have resolved this issue today in such a manner. Still, bankers have their own views on this matter, and we will take those views into account in our future legislative work.