Debit and credit of Crimea

The banking credit payment issue disturbed the sleep of many Crimeans who believed that the life in Russia would write off all debts owed to Ukraine. But an insinuatingly-threatening voice of a bill collector reminded: “Pay off your debts and sleep tight!” Probably, the Crimean “Premier” Sergey Aksenov who knows more than average debtors was quick to assure that no one has right to demand payments of the debts (although only the moral right). He concealed the legitimate right and traditionally advised to complain to the public prosecution office. Surely this departmental structure won’t write off the debts, so the perennial question “where to get money from” is familiar to everybody again. Sooner or later the frozen situation with banking credits payments should have aggravated in Crimea. Two billion dollars taken by Crimeans on different credits in Ukrainian banks will not become a gift for referendum, especially when the country goes through a bad stretch. It’s exactly what debt collectors remind the residents of the peninsula about calling them more often than relatives. There is what to pay back. “Under Ukraine” the credit provision was blooming in the autonomy. According to the National Bank of Ukraine, there used to be 1200 branches of Ukrainian banks on the peninsula, in each of which it was possible to take on credit, including credit granting systems of large stores. That’s why every third resident of Crimea always counting on extra or permanent income from the tourist season took out a loan. Many banks, who knew a client, used to issue loans for purchasing flats, cars, home appliance without even requiring a certificate of income. Other days came. Euphoria was fading and the situation has become a stalemate: there is no money to pay off a loan, nor is there a bank to issue a loan. It is impossible to pay off a debt because, first of all, according to the reality a bank is not in Ukraine. Secondly, there is nothing to pay it off with since a tourist season giving an income the most of the debtors and small businesses failed, the economy stands still, the unemployment is increasing and rainy day funds ran low. Thirdly, new Russian banks are reluctant to issue loans being afraid they will be left with debts as Ukrainian banks. Banks aren’t charity organizations. That’s why those of them who have already risked to work in Crimea as well as the ones that left the peninsula will try to protect their assets through a variety of means. It doesn’t even matter whose bank it is. Business is business. Making a public appearance on the First financial-investing business forum in Yalta a director of the retail business department of Russian National Commercial Bank Vyacheslav Dusaleev said: “All the Crimeans are lily-white because they don’t have a credit history with Russian banks. There is no information about old credits, old debts, arrears and the execution of liabilities to a bank. Crimeans have two passports now: the Russian passport and the Ukrainian passport, so a person can take a huge loan and move to Ukraine. We understand that the debt recovery procedure from people who moved to Ukraine is going to be exceptionally complicated.” As it turned out, Ukrainian banks kept the credit history and started to recover the debts by means of collectors. Other voices are heard. Residents of “the bad luck peninsula” should not hope for indulgences from banks now. They do not want make a present of money and currently grant consumer loans only to state-employees and retirees who receive their salaries and pensions through their banks. A vice-chairman of the State Duma’s Financial Market Committee Anatoliy Aksakov admitted on the same forum in Yalta that “unfortunately, the quality of banking services still doesn’t correspond to what Crimeans used to receive during the Ukrainian period,” meaning to say that the quantity of branches should be at least 700 but not 500 as it is now. The situation with other types of loans is no better. Many have their flats and vehicles under pawn. They need to pay it off now and there is a little hope they could take a new loan. It is projected that real estate mortgage and car loans will be available in Crimea in the fourth quarter of 2014 but with a higher interest rate to level the risks. Housing credits will be available again only for state-employees and servicemen because of absence of the Ukrainian registries. In fact, when it comes to a big business, Crimean authorities can’t balance debit with credit. Forbes-Ukraine experts projected already in June that “if a loan portfolio of Ukrainian banks was 20 bln. hryvnyas on the first of April, then there were in two and a half times less funds (only 8,5 bln. hryvnyas) on the first of June. The rest of the debts, probably, “left” for portfolios of Russian banks or have been retransferred to collectors. The time has come. There is no wonder that at first a self-declared “prime minister” Aksenov announced about the necessity to pay and then about the moral right not to pay to Ukrainian banks. Nowadays the problem is down to the level of social activists. One human rights committee “Matter of Honor” intends to originate a bill on exemptions from loan debt to Ukrainian banks for residents of Crimea that implies moratorium for compulsive repayment of credits to the State Duma of Russia. The only question is who is going to pay for the free cheese in mouse trap, which cost is already three times as high.