THE ECONOMIC REFORM PACKAGE WILL IMPROVE INDUSTRY QUALITY

The Economic Reform Package, which was recently announced to the public, includes crucial topics for the financial sector. When analysing the contents in detail, it is possible to recognise the measures that aim to improve the industry, along with methods to eliminate the deficiencies and improve depth and service quality. The list of reform areas that determine the reinforcement of the industry are underlined under the main headings of this article.

INCREASING THE ASSET QUALITY OF THE BANKING INDUSTRY

The quality of receivables and the turnover ability on time are significant in meeting the requirements of the real sector with the loans provided by the banking industry. Thus, this reform envisages a convenience for companies facing payment difficulties that are active in production processes and expected to contribute to employment in the long run. Withing the reform, ther are methods such as restructuring, rehabilitation and funding support for some companies.

STRENGTHENING THE CAPACITY OF ASSET MANAGEMENT COMPANIES

In order to relieve the workload arising from problematic receivables, an infrastructure is planned for asset management companies to operate within a more robust structure. This paves the way for banks to better focus on financing and credit transactions, which are their primary duties.

A SEPERATE DRAFT LAW FOR INTEREST-FREE FINANCE

A draft law is being considered to strengthen interest-free finance, regulate the ecosystem, and establish a mechanism for participation finance in the Istanbul Arbitration Centre (ISTAC). The draft law, which we expect to come to the parliament in the upcoming period, aims to make the participation finance ecosystem more compact.

IMPROVING THE FINANCIAL SYSTEM INFRASTRUCTURE

One of the key areas of reform is the infrastructure development for the financial system. In this context, the Turkish-card payment brand TROY is being structured as a different company. Along with this, establishing the economic, technological and legal structure of digital money by authorising digital banking licenses is on the agenda of the Central Bank of Turkey.

STRENGTHENING CAPITAL MARKETS

The action plan also assures regulations to encourage equity financing. Encouraging the issuance of green bonds and green sukuk from capital market institutions is also aimed. It is stated that the project financing fund and the project-based securities regulations will be completed by the stock exchange management. The crowdfunding practices regulated by the Capital Markets Board of Turkey are expected to be promptly implemented. It paves the way for those under 18 to be included in the Private Pension System

EXPANDING ON FINTECH

Within the context of increasing financial inclusion, it is targeted to develop a fintech strategy report and allow fintech institutions within the payment fields access to the payment systems of the Central Bank of Turkey.

THE ROLE OF TKBB

The reform areas that have been identified are planned to be implemented by 2023.. The Participation Banks Association of Turkey (TKBB) is also included in the Package within its own expertise. Thus, as TKBB, we will contribute to the work carried out in this scheme. For example, we have established a working group regarding the legal regulations related to the sector./ working group for legal regulations regarding the sector. We believe that these activities will increase the quality of financial services in our country and and strengthen competitive power. We hope that this action plan will contribute to the finance sector and benefit Turkey.

TKBB Secretary General Osman Akyüz

You can view the content in the 25th issue of Katılım Finans. (THE ECONOMIC REFORM PACKAGE WILL IMPROVE INDUSTRY QUALITY)