I. INTRODUCTION

Numerous countries around the world continue to take measures against the economic challenges that the Coronavirus (COVID-19) outbreak can cause in their countries. Canada, France and the United Kingdom are among those countries who recently announced comprehensive measure packages to tackle economic disruptions. Meanwhile, crucial interest rate cut decisions were taken by the Central Banks in Norway and the United States of America. With this regard, the measures against the possible effects of the epidemic in our country were announced by the Presidency, the Central Bank and the Banking Regulation and Supervision Agency along with the public banks and private banks

II. MEASURES TAKEN IN TURKEY AGAINST THE OUTBREAK

a. Measures Announced by the Presidency

On 18 March 2020, the economic measures planned to be taken against the Corona Virus epidemic were announced by the President Erdoğan with the new economic package (“Package”) called “Economic Stability Shield” The 19-Article Package, suggests the allocation of a total amount of 100 Billion Turkish Liras for the measures to be taken, whereas the significant part of the Package is related to the financial and banking sectors, which face the risk of being affected the most by the possible recession in the economy. Some of the introduced measures are as follows.

b. Measures Announced by the Banking Regulation and Supervision Agency (“BRSA”)

New measures were introduced in the field of economy and finance against Coronavirus by the Banking Regulation and Supervision Agency (“BRSA”) with the decisions dated 16 March, 17 March, 19 March and 23 March. While some of the measures announced by the BRSA are in line with the measures announced by the Presidency, others are related to the operations and business continuity of the banks.

With a series of measures published on March 16, the BRSA announced that the business continuity plans of the banks will be reconsidered and necessary measures will be taken to minimize the risk that may occur due to the outbreak. Furthermore, according to the measures published on March 17, 2020, the 90 days foreseen for reclassification of defaulted loans as non-performing loans is extended to 180 days until 31 December 2020, for all receivables and credits of banks. The obligation to re-classify the receivables which are classified as liquid claims after the restructuring and whose capital and/or interest payments are defaulted more than thirty days or are restructured once more within the one-year monitoring period, under the “Third Group – Loans with Limited Collection Opportunities” class is discarded.

BRSA decisions dated 19 March 2020 and numbered 8949 and 8950 are related to non-bank financial institutions, mortgage loans and loans with housing collaterals. Per the decision announced by the Presidency regarding mortgage loans and loans with housing collateral, the ratio of the credible amount has increased from 80% to 90% for the mortgages and loans with housing collaterals that will be used for the houses worth 500 Thousand Turkish Liras and below. Also, several measures have been taken regarding non-bank financial institutions. The measures that will be valid until 31 December 2020 suggest an extension of the 90-day delay period set to spare special provisions for non-bank financial institutions provided in the Article 6 of the Regulation on Accounting Practices and Financial Statements of Financial Leasing, Factoring and Financing Companies to 180 days for financing and factoring companies and 240 days for financial leasing companies.

You can access the full text of the decisions on the official website of the BRSA or from the links 16 March, 17 March, 19 March – 1, 19 March – 2 ve 23 March

c. Measures Announced by the Central Bank of the Republic of Turkey (“CBRT”)

Within the scope of economic measures taken against the epidemic, the Central Bank of the Republic of Turkey also introduced a set of measures with the decisions numbered 2020-15 and 2020-16 on March 17, 2020, regarding the monetary policy, liquidity facilitations for banks and regulations on rediscount credit arrangements According to these regulations;

You can access the full text of the decisions on the official website of the CBRT or from the links 2020-15  and 2020-16  

d. Measures Announced By The Public And Private Banks

In addition to the measures announced and enforced by public authorities, public and private banks have also announced the measures they have taken against the Coronavirus epidemic. The measures announced by several banks include the postponement of capital, interest and commission payments on credits, the restructuring of commercial and SME loans used by corporate customers, especially in the tourism, logistics, shopping malls and retail sectors, and determining a grace period that varies according to the need, providing additional limit amounting to 3-month salary expense of companies make their salary payments through the bank, with the condition that they do not reduce their current employment numbers, not charging fees for EFT or money order transactions to be made through digital banking applications and to restrict the working hours of bank branches to 12:00 – 17:00 on weekdays and focusing on mobile or online banking applications to protect the health od the customers and bank employees. [1]

III. CONCLUSION

Many private and public institutions continue to take economic measures against the Coronavirus (COVID-19) epidemic, which affects the whole world and our country alike. While the economic package titled “Economic Stability Shield” announced by President Erdoğan on March 18, 2020, is the inaugural measure taken, the policy rate cut by the Central Bank is just as remarkable. The effects of these measures which aim to provide a banking system where only a few people physically coexist to prevent the spread of the epidemic and alleviate the markets in terms of both the liquidity and maturity dates are expected to be experienced in the upcoming period.

Kind regards,

Kılınç Law & Consulting

[1] bkz Milliyet Gazetesi’nin 24.03.2020 tarihli internet haberi “https://www.milliyet.com.tr/ekonomi/son-dakika-bankalardan-flas-karar-kredi-odemeleri-6171744”