“There are two ways the collectors agencies work. Most successful ones buy out problem loans from the banks at a discount and negotiate with the clients themselves. The second way is when the collectors are being hired and paid by a bank. But currently there are no legal regulations for debt recovery agencies. Quite often their activities conflict with Russian law.”

Anatoly Aksakov, President of the Association of Regional Banks say that has prompted his organisation and the Association of Debt Recovery agencies, to propose setting up a regulatory system and creation of a special state fund to buy out bad debt.

“We need to create a structure that would monitor credit histories and relations between banks and their clients. We also suggest creation of a special state fund able to buy out problem loans. And we also need to create the opportunity for restructuring loans.”

If things get much worse, some experts think that up to 20% of Russia's corporate and individual bank loans could become bad debts. That makes managing the problem with a regulated system all the more vital.