Turkish Government Implements Measures to Enhance and Strengthen Credit Markets

Publication | March 7, 2017

In order to stimulate credit markets and increase financial stability, during 2016 the Turkish government put forward certain reforms and issued new regulations affecting financial institutions, including banks, factoring companies and financial lease companies. Notable points include:

  1. evaluation of capital reserve requirements to ensure all banks have sufficient reserves against risk exposure;
  2. classification of risk profiles for securities and calculation of reserve requirements of each risk class in accordance with standards set by IFRS;
  3. loosening of existing reserve requirements for deferred or restructured consumer loans and credit card payments and restructuring of consumer loans and credit card payments for up to 72 months;
  4. increase of the maximum number of installments on credit cards for the purchase of certain consumer goods in order to stimulate the consumer market;
  5. loosening of reserve requirements for loans provided to energy investments to ensure the stability of energy supply; and
  6. postponement of the application of certain reserve requirements on loans to be extended to companies transferred to Saving Deposit Insurance Fund under the state of emergency measures.

The effects of the implementation of the above listed regulations are yet to be seen; however, it is expected that the Turkish government will maintain its efforts to boost the local credit market in 2017. 


Originally prepared by Chadbourne & Parke. Chadbourne & Parke combined with Norton Rose Fulbright US LLP on June 30, 2017 and is now known as Norton Rose Fulbright US LLP.

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