TCMB tightened the security requirement for high-interest loans

The Central Bank of the Republic of Turkey (TCMB) also made arrangements regarding loans in the amendment it made to the securities facility circular. With the regulation published in the Official Gazette, the additional securities liability for loans exceeding the upper limit of the reference interest coefficient in loans was increased from 90 percent to 150 percent. The Central Bank of the Republic of Turkey (TCMB) made amendments to the securities facility regulation it introduced in August of last year. Accordingly, the TCMB increased the additional securities liability for loans exceeding the upper limit of the reference interest coefficient in loans from 90 percent to 150 percent. With the addition made to the temporary article 7 of the Communiqué on Securities Facility, the securities liability in the first stage of the credit coefficient will not be applied for banks that meet the 70 percent criterion in their TL balance sheet liabilities. The regulation made in August aimed to limit the credit growth rate and align the interest rates on the loans with the policy rate, and required banks to establish a 20 percent security facility for the loans applied as 1.4 times the annual compound reference rate determined by the TCMB. If the credit interest rate exceeded 1.8 times the reference coefficient, the facility rate was determined as 90 percent. With the new regulation, this facility rate was increased to 150 percent.