Procedure for gradual release of collateral or replacement of security for personal loans

Applications are reviewed within a period of no more than fifteen days. If additional study and/or verification, or a request for supplementary documents is required, the review period may be extended up to one month from the date of receipt by the Bank.

The procedure for partial release of collateral involves the following set of actions carried out by the Bank:

• Assessment of Collateral Sufficiency: An analysis is conducted to determine whether the remaining collateral is sufficient to cover the outstanding debt, taking into account risk assessment in accordance with the Bank’s credit policy requirements.

• Proportionality Check: The amount of the repaid debt is compared with the value of the collateral being released to ensure compliance with the proportions established by the Bank’s internal regulations.

• Valuation and Liquidity Assessment: The market value and liquidity of the remaining collateral are evaluated using official data sources. If necessary, an independent appraiser may be engaged to determine the value of the collateral.

When replacing collateral, the Bank sets the following requirements for the pledged asset securing obligations under the loan agreement:

• Legal Status: Confirmed and registered ownership of the collateral, as well as the owners’ lawful authority to pledge it.

• Value: The proposed collateral must have a market value sufficient to cover the credit risks.

• Access: The Bank must have unobstructed access to the collateral for evaluation, monitoring, and enforcement in case of default.

• Liquidity: The collateral must be highly liquid, meaning it can be quickly sold on the market at a reasonable price.

• Sufficiency: The value of the collateral must be adequate to cover the remaining loan balance, taking potential risks into account, in accordance with the Bank’s credit policy.

• Control: The Bank must be able to monitor the condition and safety of the pledged asset or have access to it for inspection purposes.

• Freedom from Encumbrances: The asset must not be subject to seizure, other pledges (except for pledges offered for subsequent collateral), obligations to third parties, or restrictions that would impede the Bank’s rights to the collateral.

For the purpose of making a reasoned decision on the possibility of replacing the existing collateral, the Bank’s staff conduct a mandatory inspection of the proposed new collateral.

After the inspection and evaluation, the Bank prepares a written conclusion and a draft decision/protocol, which are submitted for review and approval to the authorized body/person.

The pledged property must be insured against the risks of damage, loss, or destruction. The Bank is designated as the beneficiary under such property insurance contracts.

The decision on the possibility of releasing or replacing collateral is made by the Authorized Body based on the grounds stipulated in the internal regulatory documents.

• violation of the Borrower’s obligations under the credit agreement;

• deterioration of the Borrower’s financial condition, threatening the fulfillment of obligations under the credit agreement;

• the property is under prohibition, arrest, or encumbered by third-party claims;

• refusal by the Borrower’s spouse to provide consent for pledging new collateral;

• failure to provide the necessary documents or the Bank having doubts about the authenticity of the submitted documents;

• insufficient value of the remaining pledged property or new collateral to ensure proper fulfillment of obligations under the credit agreement;

• risk of demolition of the building/structure or other loss of property;

• collateral does not meet the Bank’s requirements.

In the event that the Authorized Body makes a positive decision, the Bank notifies the applicant in accordance with the method specified in the application and schedules the date and time for execution of the documents.

In the event that the Authorized Body makes a negative decision, the Bank sends the Client a written, reasoned refusal within three banking days.

Additional agreements and pledge agreements, the subject of which is the provision of new collateral to the Bank, are executed by a Bank employee in accordance with the Bank’s standard forms and do not require notarization or state registration, except in cases предусмотренных by law. Relevant recommendations regarding state registration of the agreement and/or the need for notarization are provided by the legal counsel of OPERU or by lawyers of the Legal Department.