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Colombia financial regulator may take steps to curb credit limits

BOGOTA (Reuters) – Colombia’s monetary regulator stated on Wednesday it might take measures to counteract ballooning client credit score limits and deal with rising family debt as rates of interest and inflation climb.

The quantity of credit score obtainable on bank cards has shot as much as 96 trillion pesos, some $22.7 billion, from simply 62 trillion pesos earlier than the coronavirus pandemic, figures from the Superintendency of Finance present.

The measure would ask banks to be liable for top credit score limits which go unused by shoppers, hitting their backside strains.

“Monetary entities might do good administration by way of controlling the expansion fee of client debt,” stated the regulator’s superintendent Jorge Castano on the sidelines of a banking convention in Cartagena.

“The portion of cash households or debtors are utilizing to pay their money owed is starting to develop and if we add the impact of inflation clearly there shall be a higher stress on fee capability,” Castano added.

The measure will go into impact relying on quarterly outcomes for banks within the fourth quarter, he stated.

Castano additionally flagged as regarding longer mortgage phrases, that are climbing above eight years whilst funds are deteriorating.

Client credit score has grown because the economic system has rebounded and is close to 22%, a lot larger than the same old common of 8% or 9%, he stated.

“Historical past tells us that when there may be progress in client credit score it is pure {that a} portion of that debt begins to deteriorate,” he stated.

(Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb)



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