Amendments to (a) Regulation on Credit Operations of Banks and (b) Regulation on the Establishment and Operation Principles of Leasing, Factoring and Consumer Finance Companies, dated December 12,2017
The Regulation on the Credit Operations of Banks which was published in the Official Gazette dated November 1, 2006 with No. 26333 was amended through the amendment regulation, which was published in the Official Gazette dated December 12, 2017 with No. 30268. According to the newly introduced second paragraph of article 12/A, loan to value ratios for car loans extended to consumers are set as follows:
- If the invoice value is up to TRY 100,000.00, the loan to value ratio shall not exceed 70 percent.
- If the invoice value is higher than TRY 100,000.00 loan to value ratio is 70 percent for the first TRY 100,000.00 and 50 percent for the part exceeding, TRY 100,000.00.
The Regulation on the Establishment and Operation Principles of Financial Leasing, Factoring and Consumer Finance Companies which was published in the Official Gazette dated April 24, 2013 with No. 28627 was also amended through the amendment regulation, which was published in the Official Gazette dated December 12, 2017 with No. 30268 in line with the amendment to the Regulation on Credit Operations of Banks. The newly introduced first sub-article of article 11/A sets the loan to value ratios as 70% and 50%.
For second hand cars, hull policy value shall be the base for loan to value calculations.
The new amendments only cover consumer loans. Real and legal persons which act with commercial/vocational purposes are out of scope of the limitations.
göktaş Attorneys-at-law