The Banking Regulation and Supervision Agency recently published three amendment regulations, collectively amending maximum installment periods permitted for credit in relation to certain types of purchases. These regulations were published in Official Gazette number 29543 on 25 November 2015, entering into effect on the same date. Changes apply to the Regulation on Credit Transactions of Banks, the Regulation on Bank Cards and Credit Cards, and the Regulation on Establishment and Rules of Procedures Regarding Financial Leasing, Factoring and Financing Companies.
The installment period for credit repayments must not exceed thirty-six months, according to the Regulation on Operations of Bank Credits and the Regulation on Establishment and Rules of Procedures Regarding Financial Leasing, Factoring and Financing Companies. The recent changes expand the exceptions to be this to be credit (and loans to re-finance credit) for:
- Goods or services purchased as an integral part of a housing acquisition and housing renovations, within the scope of Article 648 of the Turkish Civil Code.
- Financial leasing of housing to the consumer (new exception).
- Other real estate credit, aimed at acquisition (new exception).
- Educational services (new exception).
The maximum period of vehicle loans and loans granted to re-structure vehicle loans continues to be forty-eight months.
The Regulation on Bank Cards and Credit Cards outlines maximum installment periods as follows:
- Nine months for purchases of goods and services paid by credit cards and cash withdrawals.
- Four months for purchases of jewels paid by credit cards and cash withdrawals.
- Twelve months for white ware, furniture and education related expenditures paid by credit cards and cash withdrawals. This is a new provision.
- Installments continue to be unavailable for telecommunications-related expenditures paid by credit cards, as well as food, grocery, fuel and gift cards, gift checks, or similar expenditures which do not involve a substantial good or service (Article 26(7)).
- Installment periods are introduced for corporate credit cards. These include a nine month maximum installment period for cash withdrawals and purchase of goods and services, increasing to 12 months in relation to white ware, furniture and education-related expenditures (Article 26(8)).
Please see the links for the full texts of the Regulations (only available in Turkish)
- Regulation Amending the Regulation on Credit Transactions of Banks
- Regulation Amending the Regulation on Bank Cards and Credit Cards
- Regulation Amending the Regulation on Establishment and Rules of Procedures Regarding Financial Leasing, Factoring and Financing Companies
Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.