The amount of credit available on credit cards has shot up to 96 trillion pesos, some $22.7 billion, from just 62 trillion pesos before the coronavirus pandemic, figures from the Superintendency of Finance show.
The measure would ask banks to be liable for high credit limits which go unused by consumers, hitting their bottom lines.
“Financial entities could do good management in terms of controlling the growth rate of consumer debt,” said the regulator’s superintendent Jorge Castano on the sidelines of a banking conference in Cartagena.
“The portion of money families or debtors are using to pay their debts is beginning to grow and if we add the effect of inflation clearly there will be a greater pressure on payment capacity,” Castano added.
The measure will go into effect depending on quarterly results for banks in the fourth quarter, he said.
Castano also flagged as concerning longer loan terms, which are climbing above eight years even as payments are deteriorating.
Consumer credit has grown as the economy has rebounded and is near 22%, much higher than the usual average of 8% or 9%, he said.
“History tells us that when there is growth in consumer credit it’s natural that a portion of that debt begins to deteriorate,” he said.
Source: Economy - investing.com
