Banks Will Now Give Loans Based on Salary

Actions were taken following the words of Lütfi Elvan, Minister of Treasury and Finance, saying, "There is no problem in corporate loans and their repayment. However, we are discussing with banks to limit retail loans since there is a serious increase."

The work of the Central Bank, the Banking Regulation and Supervision Agency, the Banks Association of Turkey, and the Participation Banks Association of Turkey will be clarified next week. Accordingly, the formula for limiting retail loans according to income, as in credit cards, will be put on the agenda.

Limit can be up to 4 times of the income

Banks set limits for credit card users. The first-year limit for those who will have a credit card for the first time is 2 times their monthly documented income. In the following years and people who had credit cards previously can have a maximum of 4 times their monthly net documented income. This is not the case for consumer loans. The economy administration plans to apply a similar formula in consumer loans. Accordingly, consumer loans will be able to be given at a certain fold of monthly income.

It has risen to 34.5 million

The economy administration is also working on increasing the provisions set aside for loans. While there is concern that the lively domestic demand will create inflationary pressure, how the recent loans have been used will also be taken into account. According to the risk center report of the Banks Association of Turkey, the number of people using retail loans increased by 1.3 million in the last year, excluding non-performing loans, reaching 34.5 million.

There will be no change in maturity.

No change is expected in loan maturities. The BRSA increased the general maturity limit for consumer loans to 60 months in 2019. At the end of 2020, the maturity limit for consumer loans was reduced to 36 months. It has been learned that the BRSA will not set a new maturity limit. Through loan and credit card installment restrictions, the institution reduces the impact of stronger demand on the macro equilibrium during periods of accelerated growth.

Minister Elvan had given a signal for measures

Lütfi Elvan, Minister of Treasury and Finance, held a meeting with the deputies on the priorities of the economy after his presentation at the Justice and Development Party (AK Party) Central Executive Board (MYK) meeting in the past few days. Elvan said, "There is no problem in corporate loans and their repayments. However, we are discussing with banks to limit retail loans since there is a serious increase. We have taken several measures in this regard but new measures will also be on the agenda. We asked banks to carefully monitor retail loans. In addition, we will establish a new procedure on whether corporate loans, that are, incentive loans received for an investment project, are actually used for the relevant project."