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    Citizens delved into overdrafts // In the coming months, the growth of this type of lending will accelerate

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    Banks are increasing the issuance of overdraft cards – in July it reached a two-year high, while the average check fell to a minimum over the same period. As a rule, with such a service, overspending is connected to a regular debit card. First of all, it is common among payroll customers of banks. Such debt is traditionally more expensive than a regular credit card or personal loan, but it is much easier to get the money and service payments. Experts see the preconditions for the continued growth of the segment, but they also note a number of constraining factors.

    In July, Russian banks increased the issuance of overdraft cards to 30 thousand, this is the maximum since March 2020, an increase compared to compared to June, amounted to 26.3%, RIA Novosti reported, citing data from the Scoring Bureau (the former Equifax, is in the top 3 in the market).

    The volume of debt on overdraft cards increased by 1.4% to RUB 14.8 billion, while the total number of cards in circulation increased by 2.7% to 607.4 thousand .

    According to Oleg Lagutkin, General Director of the Scoring Bureau, the observed increase in the number of overdrafts can be explained by the “flow of payroll projects of companies that previously had foreign owners from one bank to another.”

    According to her, July and August are traditionally a time of big expenses associated with holidays, preparing children for school, which “in one way or another affects the growth of credit debt to banks, and receiving an overdraft, especially on a salary card,— easy for a consumer and not too risky for a credit institution.”

    Overdraft is a convenient product in the presence of a grace period, adds Natalia Bogomolova, an analyst at NRA bank ratings. “It mainly works for debit cards, which receive regular payments, in particular salary, which are a certain guarantee for the bank.” Among the advantages, the expert names the fact that there is no need to draw up a separate card, as well as the functionality for automatic debiting of payments.

    “The overdraft market is usually stable, the limits are determined and controlled by banks, the delay is consistently high, but controlled. So we can expect the trend to continue,” says Ms. Terekhina. At the same time, she doubts that the exit of foreign companies and banks, as well as the imposition of sanctions, will have a serious impact on this market. “Competition in the field of payroll projects has always been high, this is the fastest way to attract a large client base at the same time, which can and will use a wide range of banking products, including loans and deposits,” the expert explains.

    At the same time, the credit card market in July, according to the same “Scoring Bureau”, on the contrary, decreased by 4.1%, to 1.7 million issued cards. The average limit on cards decreased by 0.8% to 68.7 thousand rubles

    negative (minus 0.9%), but recovering very actively”, adding 0.7% in July after rising by 0.2% in June and shrinking in May-March (total by minus 3.7%). According to the regulator, growth may accelerate in the coming months on the back of lower interest rates and an increase in the risk appetite of banks.

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