Turkey says state-run Halkbank to restructure debts of tradesmen
The Turkish government said state-run lender Halkbank will restructure the debts of tradesmen and craftsmen with advantageous repayment terms, Dünya newspaper reported.
The bank will waiver interest penalties on arrears and allow the companies to repay the loans over 18 months, Trade Minister Ruhsar Pekcan said on Friday, according to Dünya.
The restructuring programme will be run under TESKOMB, a union representing employers. The government has approved the scheme to help alleviate financial pressures caused by the COVID-19 pandemic, Pekcan said.
Turkish President Recep Tayyip Erdoğan announced plans last week to help deal with problem loans in the banking industry when announcing a new economic programme for the country.
Borrowing by businesses and consumers surged last year after the government introduced measures to encourage banks to lend and the central bank kept interest rates at below annual inflation. The measures increased demand for imports, widening the current account deficit and leading to losses for the Turkish lira.
Dünya did not mention the total value of the loans that could be restructured under the plan.
The central bank has increased borrowing costs for banks to 19 percent from 10.25 percent since early November to help defend the lira and rein in inflation. Investors are urging the government to refrain from unorthodox, populist economic policies to back the central bank’s efforts.
Interest rates on commercial loans in Turkey average more than 20 percent.