Will banks reschedule the payments of credit and credit card debts due to the coronavirus outbreak?

The banks attract public attention, after the statement of Recep Tayyip Erdoğan's statement on credit payments, "Credit card payments will be delayed until the end of June” which is made to alleviate the effect of the Coronavirus on the economy. While many banks only postponed credit debts, some banks stated that they would also offer the possibility to postpone the credit card debts. Treasury and Finance Minister Berat Albayrak demanded from individuals to complain banks that they do not postpone credit card debt and credit debt to the Banking Regulation and Supervision Agency (BRSA).

Regarding the regulation in the coronavirus precaution plan of the General Assembly of the Parliament related to the amnesty of the registry; The blacklist will be ignored if those who entered the blacklist by disrupting their principal and installment payments before March 24, 2020, paid or structured their debts until December 31, 2020.

Some banks have made decisions to provide additional limits for the daily banking needs and commercial activities of individual and corporate customers, and, if necessary, to increase the credit card limits at the time of shopping, especially for health and food.

Most of the banks receive applications for credit card debt and credit debt deferral via the internet branch, website, and mobile banking. Credit deferrals, which can be made through the mobile applications of some banks, can also be made from branches if desired. Detailed information on credit deferments can be obtained by contacting the customer service number of each bank.

Things to Know Regarding Credit and Credit Card Debt Deferral

Some banks have made decisions that “Principal, interest and installment payments of the individuals and legal entity customers until April 30 will be delayed until June 30 under the current conditions if requested”; some banks also include arbitrary practices such as "it can be postponed until June 30 without requiring an additional condition”.

Especially, private banks can demand interest, commission, and expenses from their customers. It turned out that some private banks applied default interest in loan delays, requested too many documents in the request for readjustment, and applied a higher interest rate than the current loan rate in readjustment.

In addition to the banks that reflect the postponed installment part for 3 months in a 12-month installment loan to the remaining 9 months, some banks try to collect the deferred 3-month part by adding 3 months to the maturity date. It was learned that many banks refused their deferral requests on the grounds of “we did not receive the letter” and did not respond favorably to loan requests due to the tightening of the credit standards.

No matter what interest rate the loan was taken, when all credit is restructured at that rate, there is a bigger problem for debtors who took credit with high interest in the past. The credit guarantee fund (CGF) loans are structured on interest charged by putting a 1 percent commission on them.

Despite the Central Bank's interest rate cut last week, it was observed that private banks applied the old rates in deferring loans even some banks increased the average of loan interest rates. Thus, in a commercial loan of 50 thousand Turkish liras with a 3-year term, the total payment increased by 1300 Turkish lira.

As known; borrowings are made with cheques and promissory notes in many areas of the retailing. In this area, a regulation beyond the amnesty of the registry is required.

Banks require bearing interest burden on credit deferral, making life more difficult for ordinary low and middle-income citizens. When all the financial institutions demand this in these difficult days that we are going through, the following question comes to mind: since this would be done, what was the need for the circular?

Attorney at Law Funda Kurt
Construed - Tuba Kızılkaya / Lawyer

Güneş & Güneş Law Firm
Lawyer | Law Firm | Legal