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8.1.2 Loans
The Credit Guarantee Fund (KGF) allotment has been raised to TRY500bn ($77bn) for businesses and individuals, according to a presidential decree published in the Official Gazette on March 30.
The KGF covers 7% of default losses.
“While our state banks are standing by our citizens with all the resources they have, we are utterly saddened by the attitude of the privately held banks,” Berat Albayrak said on April 12 in a video posted on Twitter.
State-owned Ziraat Bank, Halkbank and VakifBank had permitted customers to delay payments of loan and credit card debt worth more than Turkish lira (TRY) 60bn ($9bn), Albayrak said, adding: “I, once again, invite private banks to be a part of our unity and solidarity during these times with their attitude.”
Head of the Union of Chambers and Commodity Exchanges of Turkey (TOBB) said in an April 7 written statement that local lenders were rejecting loan applications from TOBB members by stating that the “[credit] limits have been reached”.
The government-run trio of Ziraat, Halkbank and Vakifbank, responded with a statement that said TOBB’s criticism was “unjust and unreal”.
April 12 saw Turkey’s finance minister Albayrak call on private banks to do more to help customers hurt by the pandemic’s economic impact, noting that state-owned banks had offered delays in repayments for loans.
On April 14, Albayrak lashed out at private banks for poor response amid pandemic.
From May, the sum of a bank’s loans, 75% of its securities portfolio and 50% of its central bank swap balances must be higher than the sum of its Turkish lira (TRY) deposits and 125% of foreign currency deposits, the new regulation stated on April 18. For banks that abide by Islamic banking regulations, known in Turkey as participation banks, the loans, securities and swaps should equal at least 80% of deposits.
Testing the limits of abnormality. Under normal conditions, the Turkish banking industry would play that ratio like a fiddle but conditions are testing the limits of abnormality as time passes.
35 TURKEY Country Report May 2020 www.intellinews.com
