Legislative amendments to Turkish banking regulations

Two new legislative amendments have been recently introduced to Turkish banking regulations.

1) Communiqué (No: 2021/13) (“Amendment Communiqué“) on the Amendment to the Communiqué on Procedures and Principles Regarding the Fees to be Charged by Banks to Commercial Customers (No: 2020/4) was published in the Official Gazette dated March 1, 2021 and numbered 31410. The Amendment Communiqué will be effective for loans extended by Turkish banks after March 1, 2021. Accordingly, the following amendments have been made with the Amendment Communiqué,

a) The ceiling for the loan disbursement fee that Turkish banks can impose on commercial customers has been revised as 1.10% of the loan amount to be utilized.
Prior to the Amendment Communiqué, the loan disbursement fee ceiling was set at 1% of the loan amount.

b) A new calculation method has been determined for the prepayment fees to be collected by Turkish banks from commercial customers in cases where the entire loan extended will be subject to prepayment. Prior to the Amendment Communiqué, the prepayment fee was limited to 1% for loans with a remaining maturity of less than 24 months and 2% for loans with a remaining maturity of more than 24 months. According to the Amendment Communiqué; (i) the prepayment fee will be limited to 2% for loans with a remaining maturity not exceeding 24 months; and (ii) for loans with a remaining maturity exceeding 24 months, 1% may be added to this rate for each year exceeding 24 months.

2) The Regulation Amending the Regulation on the Procedures and Principles Regarding the Monitoring of Transactions Affecting the Foreign Exchange Position by the Central Bank of the Republic of Turkey (“Regulation“) published in the Official Gazette dated February 24, 2021 and numbered 31405 (“Amendment Regulation“) introduced the following amendments

a) Borrowers whose total domestic and foreign currency cash loans and foreign currency indexed loans are USD 15 million or more as of the last business day of the relevant monthly accounting period (“Notifying Borrowers“) are obliged to make monthly notifications to the Central Bank of the Republic of Turkey (“Central Bank“). Notifying Borrowers are required to notify the Central Bank by the end of the following month at the latest.
Prior to the Amending Regulation, such notifications were made quarterly.

b) has abolished the provisions concerning independent audit. Notifying Borrowers are no longer required to have an independent audit for their notifications to the Central Bank and enter into independent audit agreements in this respect. Other legislation which sets forth the independent audit criteria for companies is reserved, and

c) has regulated that, in line with paragraph (b) above, independent auditors can no longer be users of the of the Systemic Risk Data Monitoring System (the “System”), which has been established to monitor the foreign exchange position of Notifying Borrowers and as a result, the System should be used by Notifying Borrowers directly.

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