Recent Developments
On 7 July 2022, the Banking Regulatory and Supervisory Authority (“BRSA”) published BRSA Decision No. 10265 ( “Decision No. 10265“) to clarify the implementation of the decision of the BRSA Decision No. 10250 dated 24 July 2022 ( “Restriction Decision” and, together with Decision No. 10265, “Decisions“) introducing Turkish lira borrowing restrictions for non-financial institutions that are subject to independent audit and to ensure the effective implementation of the restrictions under the Restriction Decision.
You may refer to our legal alerts dated 27 June 2022 and 19 July 2022 for the Turkish lira borrowing restrictions introduced by the BRSA.
On 21 October 2022, the BRSA tightened these restrictions with its Decision No. 10265 via its decision No. 10389 (”Decision No. 10389”).
What does Decision No. 10389 say?
Pursuant to the Decisions, non-financial institution companies subject to independent audit (“Companies“) whose foreign currency assets (“FX Assets“) exceed TRY 15 million are prohibited from borrowing Turkish lira cash commercial loans in case their FX Assets exceed 10% of the higher of their net assets and their net sales revenue of the last financial year pursuant to their most recent financial statements as of the date of the application for the Turkish lira loan.
Pursuant to Decision No. 10389, as of 1 November 2022, Companies whose “FX Assets” exceed TRY 10 million will be prohibited from borrowing Turkish lira cash commercial loans in case their FX Assets exceed 5% of the higher of their net assets and their net sales revenue of the last financial year pursuant to their most recent financial statements as of the date of the application for the Turkish lira loan.
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.
