Turkish banking authority reiterates call for flexibility

Turkish state-owned lenders have created an extra credit volume of 27.5 billion Turkish Liras (about $4 billion) in the last 10 days, the head of the country's banking watchdog has said, criticizing the private banks for the contraction of their credit pool some 5 billion liras ($737.2 million) in the same period.

"Important responsibilities have fallen on our banks to minimize the impacts of the period we are going through on production and employment," said Mehmet Ali Akben, chair of the Banking Regulation and Supervision Agency, referring to the measures of limiting social interactivity to counter the spread of coronavirus pandemic.

"We can see that public banks have successfully been carrying out credit support programs for individuals, shop owners, artisans, small-and-medium enterprises and corporations, creating a loan volume of 27.5 billion Turkish Liras in the past 10 days," he told Anadolu Agency on April 13.

"I believe that these opportunities provided to customers in temporary liquidity needs will lower the economic and social costs of the pandemic, and also increase collection capability rate of the banks in the post-pandemic period," he said.

"We have witnessed that the total loan volume of the private banks contracted nearly 5 billion liras in the same period. I'm inviting all the banks to act customer-oriented, keep the credit channels open and abide by the decisions taken by our agency and the sectoral associations," he added.

Last month, Turkish state lenders - Ziraat, VakıfBank and Halkbank - announced packages to support economic activities in Turkey, following the recommendations of the Turkish Banking Association (TBB).

Three banks said that they would postpone loan repayments of individuals and firms,...