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Feb 26 2019

Turkish banking watchdog approves help for indebted consumers

Turkey approved measures allowing consumers to restructure their loans in a latest step by the authorities to kick-start economic growth.

The banking watchdog published the regulatory framework in the nation’s Official Gazette on Tuesday.

Consumers with debts from general loans, mortgages, or persons with monetary arrears to public institutions, debts from education expenses or from car loans totalling up to 120,000 liras ($22,600) can restructure the loans over five years, according to the decision.

The Turkish authorities are implementing a swathe of measures including help with loan refinancing, tax cuts and steps to slow price increases after the economy entered a contraction and consumer price inflation hit more than 20 percent.

Debts on car loans exceeding 120,000 liras can be repaid over four years, while arrears from purchases of computer equipment, or from mobile phone purchases to a value of 3,500 liras, may be paid back over 12 months. Debts from the purchase of tablet computers or mobile phone purchases exceeding 3,500 liras can be renegotiated over six months, the watchdog said. 

The measures do not apply to loans that have already been restructured, the regulator said.