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BDDK weighs increase in private capital limit for new banks
Today’s Zaman has learned from sources close to the banking watchdog that it is planning to increase the capital limit to TL 500 million from the current TL 30 million, a radical revision. Current banking law requires both local and foreign investors to have at least TL 30 million in capital before they can be allowed to open a new bank in Turkey.
Observers evaluate the BDDK’s anticipated move as a precaution against the establishment of banks that do not have a physical presence in any country, referred to as shell banks. Such banks are usually used as a tool for money laundering, a problem Turkey has suffered from in the past.
Withstanding the shocks of last year’s global credit crunch, Turkish banks gained value as they posted remarkably high profits. The BDDK wants to make sure new players entering the Turkish banking industry do not harm the current positive atmosphere. A number of banks that had weak assets went bankrupt during a crisis in 2001. Past experience in this regard have strengthened the watchdog’s hand in introducing even stricter measures. Five investors are currently awaiting BDDK approval to be able to establish banks in Turkey.
A senior government official told Today’s Zaman that the BDDK’s decision to increase the capital limit for banks was normal, recalling that Syria, for instance, recently increased the average capital amount an investor must have in the coffers to establish a bank in the country to $200 million.
Banks, however, find the anticipated revision “too much.” A bank official told Today’s Zaman that an investor must have at least TL 1 billion so as to establish and run a bank in Turkey under these circumstances. “Only a few banks in Turkey have this capital power.”
İş Bankası, Halkbank may reconsider investment in Syria
Turkey’s largest private bank, İş Bankası, and its largest public bank, Halkbank, recently launched feasibility studies to establish banks in Syria. Following the Syrian government’s recent decision, observers argue, the two would have to forego their plans following the Syrian government’s latest regulation.
Banks, however, are not required to have a certain amount of capital to open a representative office in Syria. Banking officials say opening a representative office is not sufficient for engaging in major banking operations.
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