2.3 Regulations and Other Actions Regarding Financial System

2.3.1 Maximum Interest Rates for Credit Cards

Since November 2020, the maximum interest rates for credit cards have been determined through a predictable, rule-based method reflecting current market conditions. Accordingly, the maximum interest rates for credit cards are based on the reference rate calculated according to the Communiqué on Procedures and Principles Regarding the Fees That Banks Can Charge Commercial Clients (No. 2020/4), taking into consideration banks’ weighted average deposit rates as an indicator of the funding cost, and the calculation method for these rates is as follows (Table 2.3.1.1).

Rates calculated according to this method are announced on the CBRT website on the fifth-to-last business day of each month and take effect on the first day of the following month. In this regard, the maximum contractual and overdue interest rates applicable from November 2020 are shown in Table 2.3.1.2. 

2.3.2 Regulations Regarding Fees

Fees Chargeable to Commercial Clients

The “Communiqué No. 2020/4 on Procedures and Principles Regarding the Fees That Banks Can Charge Commercial Clients” arranges the fees that banks can charge their commercial clients for products and services they offer. The purpose of the Communiqué is to enhance predictability and transparency in transactions that banks engage with their commercial clients, to ensure consistency of concepts and terms, and to prevent excessive pricing.

The meetings held with the parties of the fee regulations in 2021 produced some feedback on methods of implementation and proposals for changes. The issues in need of attention were determined and relevant amendments were made with the communiqués published in the Official Gazettes of 1 March 2021 and 9 August 2021. Accordingly, with the amendments made to the Communiqué No. 2020/4 in 2021, the utilization fee for commercial loans was raised from 1% to 1.10%; the calculation of the early termination fee for commercial loans would be based on the maturity structure; the maximum member service fee for cards issued abroad was raised from 1.60% to 1.90%; the fee to be charged for appraisals would be no more than 15% of the amount paid to third parties; ATM fees for money transfers were raised; and fees charged for financing projects, acquisitions, mergers and privatization and for restructured financing loans were removed from the Commercial Loans category.

On the other hand, as the CBRT’s Instant and Continuous Transfer of Funds (FAST) System, designed to support the use of less cash by increasing cashless payments overall and to digitize payments, began operating for merchant payments, the communiqué on the fees that banks can charge commercial clients needed a modification. In this context, an “Account-to-account merchant payments” fee item was added to the Communiqué No. 2020/4 to charge for transactions in which goods and services are paid for by FAST or money order. Additionally, existing regulations and restrictions for member merchant transactions would be applied in account-to-account merchant payments as well, and in those transactions the sender would be charged no fee.

The CBRT has been receiving requests and complaints through various channels about the fees commercial clients pay. In this context, the CBRT responded to approximately 1,200 applications in 2021.

Regulations on Financial Consumer Fees

The Communiqué on Procedures and Principles Regarding the Fees to be Charged to Financial Consumers (No. 2020/7) published in the Official Gazette No. 31061 of 7 March 2020 regulates the fees chargeable to financial consumers for the products and services offered. The purpose of the Communiqué No. 2020/7 is to determine the procedures and principles governing any kind of fees, commissions and expenses other than interest rates and dividends chargeable to financial consumers for the products and services offered by establishments.

In view of the feedback received from the parties of fee regulations in 2021, the issues in need of attention were determined, and with the amendment published in the Official Gazette of 9 August 2021, fees for money transfers made from ATMs were raised.

On the other hand, with the need of regulation arising from the launch of the CBRT’s FAST merchant payments, the Communiqué No. 2020/7 was amended to no longer impose any fee on the sender for account-to-account merchant payments.

The CBRT responded to 9,800 requests and complaints received through various channels on financial consumer fees.

2.3.3 Advance Loans

Advance loans against investment commitment have been extended pursuant to Article 45 of the CBRT Law through development and investment banks at a maximum maturity of 10 years and with a grace period of two years to selected sectors with strategic importance in return for the receipt as advance of bills issued in Turkish lira. The applicable interest rate for such loans is 150 basis points lower than the CBRT policy rate or the floating interest rate of the TLREF index. The purpose of advance loans against investment commitment is to support highly efficient investments that will reduce imports and boost exports, to lower external dependency as well as reduce the current account deficit problem and support sustainable growth.

The total limit of the advance loans against investment commitment is TRY 20 billion, with a breakdown of TRY 18 billion to be extended through the Development and Investment Bank of Türkiye, and TRY 2 billion to be extended through other development and investment banks. The firm-based lending limit is TRY 400 million.

In 2021, advance loan borrowings and instalment payments amounted to TRY 1,529.50 million and TRY 136.94 million, respectively.