Turkey banks resist fee cuts seen as key to lending boost
Turkish banks are resisting cuts in fees that the government hopes will boost the economy through increased lending and lower costs to businesses.
Senior managers of several banks met with Hüseyin Aydın, the head of the Banks Association of Turkey (TBB), late on Monday to ask him to relay their concerns to the government, Bloomberg said on Wednesday citing people with direct knowledge of the matter. Aydın is also the CEO of Ziraat Bank, Turkey’s biggest state-run bank.
Bankers say the steps to eliminate many fees and reduce others, coupled with a ban on private banks from collecting taxes, will reduce revenue and ultimately hit profit, the people said, according to Bloomberg.
Turkey is seeking to increase lending to the economy to help meet a goal for economic growth of 5 percent this year. Loans are growing apace after the central bank slashed interest rates to below annual inflation and the government ordered state-run banks to lower borrowing costs.
Banks are also concerned about a draft law that will stiffen punishments for insider trading and market manipulation, Bloomberg said. The draft measure was handed to parliament by the government on Feb. 6 without consulting industry officials, it said.