The BRSA’s Asset Ratio Decision
With The Turkish Banking Regulation And Supervision Agency (BRSA) decision dated 18/04/2020 numbered 9000 (Decision), new regulations has been introduced in order to encourage private banks to give more credit and purchase government bonds to support the economy during the coronavirus pandemic. You may reach the original text of the Asset Ratio Decision here.
As per the Decision;
I. The following formula used to calculate Asset Ratios ’ terms has been amended:
Asset Ratio (AR) = Loans + (Securities x 0,75)+( CBT[1] Swap x 0,5)
(TL Deposit+ (FC[2] Deposit x 1,25)
- The term “Loans” refers to the total amount of loans extended by banks to private and commercial customers, excluding non-performing loans.
- The term “Securities” refers to the private sector bonds and bills of any kind of debt instruments issued by the words of the Republic of Turkey treasure, lease certificates and decisions are given to express the total value of Eurobonds, excluding issued securities of foreign residents purchased by banks and equity shares.
- The term “CBT swap” refers to the total Turkish Lira value of the foreign currency accounts given by the Banks to the CBT, calculated as per the buying rate of the CBT.
- The term “TL Deposit” refers to the sum of all TL deposits/participation funds amount, excluding bank deposits.
- The term “FC Deposit” refers to the total amount of deposit/participation funds in foreign currency (FC) held in banks, including gold and precious metal accounts.
II. Deposit Banks are required to maintain a new consolidated and individual asset ratio of at least 100% and at least 80% for Participation Banks starting from 01/05/2020.
III. The ratio will be calculated by banks and will be reviewed weekly by the BRSA.
If you would like to know more on this matter or require legal assistance, please get in touch with BerkerBerker Law Office via info@berkerberker.com or any other contact information listed at our website.
[1] The Central Bank of Turkey
[2] Foreign Currency