Turkish Banking Authority and COVID-19

Turkey

The Banking Regulatory and Supervisory Board ("BRSB") published three (3) decisions namely decision numbered 8948 on March 17, 2020 and decisions numbered 8949 and 8950 on March 19, 2020 on measures taken to prevent the damage caused by the coronavirus outbreak.

The measures are listed below:

  • According to the BRSB decision numbered 8948 and dated March 17, 2020, within the scope of Articles 4 and 5 of Regulation on Procedures and Principles for Classification of Loans and Provisions To Be Set Aside (Kredilerin Sınıflandırılması ve Bunlar İçin Ayrılacak Karşılıklara İlişkin Usul ve Esaslar Hakkında Yönetmelik), the ninety-day (90) default period for the classification of loans as non-performing loans will be increased to one hundred and eighty (180) days until December 31, 2020 for loans monitored in the First and Second Groups.
  • According to the BRSB decision numbered 8949 and dated March 19, 2020, the ratio of the loan amount to the value of the house has been increased from 80% to 90% for home loans and to be used for homes with a value of TRY 500,000 and below.

According to the BRSB decision numbered 8950 and dated March 19, 2020, within the scope of Article 6 of the Regulation on Accounting Practices and Statements (finansal tablo) of Financial Leasing and Financial Companies (Finansal Kiralama, Faktoring ve Finansman Şirketlerinin Muhasebe Uygulamaları ile Finansal Tabloları Hakkında Yönetmelik), the ninety-day (90) default period specified in the article stipulating the separation of special provisions at the rate of 20% of receivables will be one hundred and eighty (180) days for financing and factoring companies; for financial leasing companies, it will be increased to two hundred and forty (240) days. These receivables will include receivables not followed up in the account of "Receivables to be Liquidated" as of the date of this BRSB decision and will be valid for companies that allocate the expected credit loss within the scope of TFRS 9. In addition, BRSB has decided to continue to set aside for receivables that are not transferred to the account of "Receivables to be Liquidated" according to such companies’ own risk models, regardless of the default period of ninety-days (90).

Additionally, the Board of Directors of Turkish Banks Association advised on March 22, 2020 that the working hours of branches and service departments of member banks that are in direct contact with customers should be from 12:00 to17:00.

For more information about the announcements of the Board, contact your regular CMS advisor or local CMS experts: Dr. Döne Yalçın or Alaz Eker Ündar.