Turkish banking regulator plans loan, credit card limits to help financial stability

Turkish banking regulator plans loan, credit card limits to help financial stability

ANKARA
Turkish banking regulator plans loan, credit card limits to help financial stability

Turkey’s banking watchdog plans to limit consumer loans and borrowing on credit cards to support financial stability and the macroeconomic balancing process.

In a bid to achieve these goals, the Banking Regulation and Supervision Agency (BDDK) prepared a draft of regulations and opened it to review on Aug. 2.

BDDK President Mehmet Ali Akben said the draft “mainly aimed at reducing the inflation rate.”

The country’s annual inflation hit 15.4 percent in June, according to official data.

The BDDK draft envisages the reduction of the maximum repayment of dues for consumer loans from 48 months to 36 months with the exception of some cases. The repayment dues for automotive loans will also be allowed to stand 48 months maximum, according to the draft.

Payment in installments via credit card to buy mobile phones and computers will not exceed 12 months, it added.

Credit card installment schemes are also planned to be banned for jewelry again. Such schemes for electronic item purchases are also set to be reduced from six months to three months, if the BDDK draft comes into force.

The watchdog announced tighter rules on credit card payments and loans as part of the government’s plan to regulate banking services and limit the debt burden of households in 2013.

The limitation on credit card installments to pay for a number of items has been extended to revive consumption levels late in 2015.

Turkish banking watchdog, credit cards, consumer loans, inflation rate