(Reuters) – The Russian government will compensate banks that offered loan holidays to soldiers while they fight in Ukraine, according to legislation passed on Tuesday, covering 50% of the interest accrued on loans.
Banks were ordered to arrange payment holidays on loans to servicemen and their families as the Russian state sought to incentivise people to fight in what it calls a “special military operation” in Ukraine.
The central bank suggested payment holidays soon after President Vladimir Putin announced in September 2022 that 300,000 people would be mobilised to boost Russia’s military effort.
On Tuesday, lawmakers in the State Duma, Russia’s lower house of parliament, approved amendments to legislation in the second and third readings under which the finance ministry will reimburse banks for 50% of the interest accrued on loans during the payment holidays.
The original law allowed servicemen to receive grace periods on mortgages, consumer and credit card loans for the duration of their service and for 30 days afterwards.
The draft legislation must still pass through the upper house of parliament and be signed by Putin to become law.
(Writing by Alexander Marrow; Editing by Matthew Lewis)