BRSA lowers credit limits: New rates announced
The Banking Regulation and Supervision Agency (BRSA) has lowered the credit limits that development and investment banks can extend. Under the new regulation, the ratio of loans that can be extended to a single person or risk group to core capital has been capped at 30 percent, while the ratio of loans a bank can extend to its own risk group has been capped at 25 percent; a transition period has been granted to banks to resolve existing excesses.
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The Banking Regulation and Supervision Agency (BRSA) has introduced a new regulation regarding the credit limits that development and investment banks can extend.
CREDIT LIMITS LOWERED
According to the BRSA's statement, while İstanbul Takas ve Saklama Bankası AŞ (Takasbank) and İller Bankası AŞ are excluded from the scope, the total risk amount of loans that other development and investment banks can extend to a single natural or legal person or risk group, on a consolidated and non-consolidated basis, has been capped at 30 percent of their core capital.
Previously, this ratio was applied between 40 and 60 percent, depending on the nature of the bank.
LOANS TO RISK GROUPS ALSO CAPPED
With the new regulation, the ratio of the total risk amount of loans that banks can extend to the risk group they belong to, relative to their core capital, has also been set at 25 percent.
In the previous practice, this ratio varied between 35 and 55 percent.
TRANSITION PERIOD FOR EXCESSES
The BRSA has granted banks a compliance period in the event that the established credit limits are exceeded.
Accordingly, it has been decided that limit excesses in loans extended to a single natural or legal person or risk groups must be resolved by April 1, 2027. It is stipulated that limit excesses in loans extended to the risk group to which the bank belongs must be terminated by October 1, 2026.