Jewelers concerned over Turkey’s banking watchdog's ban on sale in installment
New rules ban paying for gold in installments.Jewelers are concerned about the decision of Turkey’s banking watchdog to bar customers from buying gold in installments, arguing that the practice will adversely affect sales.
“Turkish citizens do not buy these value-added products just to use them; they also buy them as presents to give on special days. These [jewelry] products should be allowed to be bought in installments of at least six months,” Hasan Çavuşculu, the head of the Ankara Jewelers and Watch Sellers Chamber, told Anadolu Agency.
The Banking Regulation and Supervision Agency (BDDK) has launched new measures to curb consumer loans and the use of credit cards to pay for goods by monthly installments, in the hope of restricting the country’s growing inflation and current account deficit. The BDDK stated on Dec. 31 that a series of new measures to limit loan and credit card use would come into effect on Feb. 1, 2014.
Under the new regulation, it will no longer be possible to buy food, fuel, mobile phones and gold products in installments, while credit card installment plans for other electronics will be limited to six months.
Sedat Çilem, a jeweler of 20 years, told Cihan News Agency that the regulation would “affect their profitability,” as people demand to pay in installments even for the cheapest transactions.
“[If the new plan goes into effect], our sales would fall by 30 percent or more,” Çilem said.
However, some representatives of the sector say the practice may benefit jewelers in the long-run, suggesting jewelers would prefer instant payment due to the volatility in gold prices.