Turkey’s watchdog warns banks against recalling loans
ANKARA - Anadolu Agency
REUTERS photoTurkey’s banking sector has been warned against recalling bank loans without “sufficient reason.”
In an interview with Anadolu Agency on Aug. 11, Mehmet Ali Akben, the head of Turkey’s Banking Regulation and Supervision Agency (BDDK), said: “We absolutely do not allow banks to recall loans on the pretext of seeking an extra profit.
“We will take necessary steps against any unfair practices in the sector. People can complain to us by calling our hotline for any wrongdoing in the sector and giving us the bank’s name.”
Akben’s warning came after President Recep Tayyip Erdoğan on Aug. 10 urged lenders to reduce interest rates in order to boost growth.
Erdoğan termed the recalling of bank loans without sufficient reason as “treason.” He told banks they should not be charging high interest rates in the wake of the July 15 failed coup attempt and promised to take action against lenders who “go the wrong way.”
Akben also warned banks to not race to collect deposits by offering higher interest rates, which reflects as additional credit costs to the borrowers.
“The banks should give up the deposits race. They made profits when the interest rates were around 7 or 8 percent as well. We believe the interest rates will go down to more decent levels.”
On Aug. 10, state-run Ziraat Bank cut home loan rates following a Central Bank decision to trim the overnight lending rate to 8.75 percent, bringing Ziraat’s owner-occupier rate to below 1 percent per month.
Halkbank followed Ziraat Bank on Aug. 11, cutting its home loan under 1 percent per month, along with many other lenders.
Akben said they expected more banks to follow state-run banks’ downward revision in consumer, corporate and housing loans.