Central Bank revises reserve requirement regulation

The Central Bank has revised its reserve requirements regulation in a move to strengthen the macroprudential policy toolkit.

Reserve requirements, which used to only be applied to the liability side of balance sheets, will now be applied to asset sides as well, the bank said in a statement.

TRY-denominated commercial cash loans given by lenders and financing companies will be subject to reserve requirements, the bank said, adding that some loans would be excluded from the measure.

“Commercial loans, which have been extended in four-week periods since April 1, shall be subject to a reserve requirement of 10% of the said loans during the maintenance periods of four weeks,” it explained.

For banks with a loan growth rate above 20% by May 31, 2022 compared to end-2021, the difference between their outstanding loan balances on a given date will be subject to reserve requirements of 20% of this difference, for a period of six months, it added.

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