The accelerated growth in housing prices, which has been observed in recent years, has led to the fact that the limit of insurance compensation for escrow accounts often does not cover the cost of an apartment, the head of the Central Bank noted
The Bank of Russia proposes to double the limit of insurance compensation for escrow accounts to 20 million rubles. This was stated by the head of the Central Bank Elvira Nabiullina, speaking with a report in the State Duma on Wednesday, April 10.
The Chairman of the Bank of Russia noted that the accelerated growth in housing prices, which has been observed in recent years, has led to the fact that the limit of insurance compensation for escrow accounts often does not cover the cost of an apartment. According to the regulator, the price gap between secondary and primary housing has also increased and reached 44% by the end of 2023 (at a rate of 10%). “Therefore, we propose that we discuss together its doubling, according to the law it is now 10 million rubles, up to 20 million rubles,” Elvira Nabiullina said.
From July 1, 2019, Russian housing developers are required to work on escrow accounts. The money of the shareholders is kept in these bank accounts until the completion of construction work. If the developer does not fulfill the obligations, the money is returned to the shareholder. The escrow money is also insured by the Deposit Insurance Agency (DIA). In case of bankruptcy of the bank, the funds will be compensated in full, but not more than 10 million rubles, this is the amount that the Central Bank proposes to double.
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