Turkish banking watchdog BDDK has fined
The BDDK has fined more than 20 banks and financial institutions a total of TRY330mn for carrying out transactions seen as contrary to its orders during the COVID-19 outbreak, during which the Erdogan administration has stepped up its credit-fuelling of an already fragile economy. However, the watchdog has not released the names of the institutions.
Since the beginning of May, the BDDK has announced four rounds of fines.
In May, a total of
In June, the regulator fined 16 financial institutions a total of TRY2.1mn.
‘Inquiry into complaints’
The banking watchdog said on
The BDDK said the fines were handed down after it examined “the complaints by individual and commercial customers conveyed to our institution during the period of battling the COVID-19 outbreak”.
Sources at BDDK told government-run new service
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
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
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
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,
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
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 regularly restructure them.
Anxiety over “bad bank”
On
Additionally, the government announced some capital hikes at state lenders but media reports overlooked the fact that the “capital hikes” in question were performed through exchanging some government papers among the
The overriding idea is that the government wants more loan growth when it comes to both individuals and firms.
The lenders are also obliged to comply with a recently introduced “asset ratio”.
©2020 bne IntelliNews
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