Page 51 - TURKRptAug20

The most common violation was a refusal by a bank to restructure its debts or offer repayment flexibility to individuals, who had either lost their jobs or had incurred large financial losses due to the pandemic.
Increasing effective interest rates through an interest calculation formula determined as in conflict with BDDK regulations and adding unfair terms to a contract were also among the common violations.
Banks were also fined for not allowing customers to use previously given credit limits without justifiable reasons.
The BDDK sources also said banks offering interest rates above the market level and introducing additional costs for credit were among the violations.
Banks that have put additional obstacles in the way of customers to discourage them from applying for credits were also fined for violating regulations, the sources were cited as saying.
Banks told to agree to payment delays ​On July 8, the BDDK told local lenders in its latest letter of instructions that retail and commercial borrowers’ payment delay requests regarding payments until end-2020 must be agreed to.
The existing loan limits should not be blocked without justified and concrete reasons, and care should be taken to ensure loan limits were ready for use, the instructions with 11 articles also said.
The regulator has also requested the delivery of convenience as regards credit card fees and has demanded that credit card fee collections should be temporarily delayed in line with the demands of customers.
Lastly, banks’ precautionary measures in terms of restricting credit card limits and closing credit cards to cash withdrawals should not be stricter than the rules specified in the legislation, according to the watchdog.
On July 9, the BDDK released a separate ruling to increase the maximum limit for credit cards for customers who cannot declare their income to TRY2,000 from TRY1,300.
Additionally, banks will not close credit cards where the minimum payment amount is not paid three times in the calendar year until end-2020.
On July 11, President Recep Tayyip Erdogan gave authorisation to the central bank to obtain real-time data from local lenders.
The central bank, the BDDK, the SPK capital markets board and the trade ministry separately issued new regulations along with amendments to existing regulations with an impact on banking.`
The BDDK has employed a proactive perspective in introducing around 50 regulations since the beginning of the outbreak, Mehmet Ali Akben, head of the regulator, said on June 14.
His figure did not include regulations or regulatory amendments introduced by other authorities, while the overall list of regulatory forbearance instances since 2016 would deserve a PHD thesis.
Local lenders assign zero weight to their FX receivables from the Treasury and the central bank although Turkey is rated at deep junk by all rating agencies.
Moreover, they calculate their FX assets at the 2019 exchange rate and they do not write defaulted loans as non-performing loans (NPL) though they
51​ TURKEY Country Report​ August 2020 ​ ​www.intellinews.com