Turkish government to regulate loans and credit cards more
If loans are issued to increase exports, production and investment, and, not to mention, to support small and medium size enterprises, we will say ‘yes’; but, we will say ‘no’ to loans that are issued for the sole purpose of increasing consumption, said deputy PM Ali Babacan yesterday. DHA photoDeputy Prime Minister Ali Babacan has said the government has been implementing regulation three specific areas across the financial services sector, namely with regard to banking services, loans and credit cards; thee objective of the regulatory measures is to raise savings rates.
During a press conference held to celebrate the 10th anniversary of Turkey’s private pension system (BES) he went on to say, “We have implemented a significant amount of regulation in this field. Now we have been working closely on three remaining areas. The banking watchdog (BDDK), Central Bank, Treasury and Development Ministry have also been in the process of leading an impact analysis of these projects. We’ll introduce more regulation in fields that we deem to possess a dangerous level of excessiveness.”
Credit volume will grow in a reasonable and balanced manner: Babacan
“If loans are issued to increase exports, production and investment, and, not to mention, to support small and medium size enterprises, we will say ‘yes’; however, we will say ‘no’ to loans that are issued for the sole purpose of increasing consumption, as the exhaustion of such a measure will only cause harm to our economy. We’ll therefore continue to implement more measures as required,” he noted.
Previous constraints that were placed the use and issue of loans for personal consumption purposes and credit cards had slightly narrowed the current account deficit, the Turkish economy’s main weakness, in addition to its need to focus on contributing more to the national nest egg, that is, improve upon its savings habits.
Babacan said the private pension system has financially provided for around 4 million citizens, equating to an amount exceeding 25 billion liras of taxpayers’ funds. Some 818,000 people participated in the system in the first 10 months of 2013. The state has contributed over 956.3 million liras to the system thus far, covering 25 percent of private policies since the start of the year.
Around 2 billion liras allocated by government
Babacan said some 8 billion liras were anticipated to be added to the system by next year, with the government then subsequently allocating around 1.95 billion liras of the national budget to the system.
“If we see more of a rise in the system’s volume, we may increase our contribution,” he said.
Meanwhile, Turkish people want to save money, but cannot do so due to high debts, according to the “Consumers’ Saving Tendencies Survey 2013” announced by AvivaSA and research company IPSOS last month.
The biggest obstacle for Turkish people appears to be their current debts, which prevent them from saving money and making investments, according to the study, in which 12,000 people participated from 11 countries: Britain, France, Ireland, Spain, Italy, the U.S., India, China, Singapore, Poland and Turkey.