According to the instruction sent by the institution to the Presidency of the Financial Institutions Association, it was aimed to prevent investments in risky assets by limiting the areas where the amounts accumulated in savings fund pools and company accounts can be evaluated and to evaluate these resources in relatively risk-free assets that can be liquid quickly.
Accordingly, savings finance companies will be able to invest their assets only in Turkish lira-denominated special current accounts or participation accounts to be opened in participation banks, in Turkish lira-denominated domestic lease certificates (sukuk) issued by the Ministry of Treasury and Finance and not based on gold, or in participation-based investment funds with a risk value of 1 or 2 and issued in Turkish lira. More prudent restrictions were introduced for both savings fund pools and company accounts.
New rules for interest-free funds and high amount contracts
In order to limit the amounts remaining in savings fund pools, it was decided that the daily non-revenue balance should not exceed 2 per thousand of the company’s savings fund pool calculated as of the end of the previous month. It was reported that the amounts transferred to the pool after the closing time of the Central Bank of the Republic of Turkey (CBRT) Electronic Fund Transfer (EFT) system will be included in the calculation the next day.
Limits for high amount contracts have also been increased. In order to include contracts within the scope of “high amount”, the limit was increased from 2 million 509 thousand 800 lira to 5 million lira, and for housing or roofed workplace financing contracts, it was increased from 6 million 274 thousand 500 lira to 12 million 500 thousand lira.
In addition, the ratio of the total amount of high-amount contracts to the total contract amount in the relevant period was limited to 5 percent. However, envisaging a gradual transition for companies established after January 1, 2025, it was decided to apply this rate as 15 percent until June 30, 2027, and 10 percent in the period between July 1 and December 31, 2027.
Contract upper limits updated
By the Board’s decision, the number of contracts that can be made with a real person or legal entity or parties in the same risk group has been limited in order to prevent risk concentration. In this context, a person will be able to sign a total of two contracts with the same savings finance company, including a maximum of one vehicle and one housing or roofed workplace financing contract.
With the decision, contract amount limits on a person or risk group basis were also updated. The maximum contract amount for vehicle financing was increased to 6 million 250 thousand liras, and for housing or roofed workplace financing to 62 million 500 thousand liras. The total amount of all contracts belonging to a person or risk group is limited to 62 million 500 thousand lira.
While BRSA gave companies a transition period to comply with these regulations, it stated that the new rules will be implemented as of October 1.
