September 10, 2014

BDDK says its official didn't speak to media on Bank Asya

Turkish banking regulatory watchdog has denied news reports claiming one of its senior officials told media that it took sweeping powers at Islamic lender Bank Asya, which has seen depositors flee and bad loans soar since it became under attack by the Turkish government.

The Banking Regulation and Supervision Agency (BDDK) didn't say whether or not it took powers at Bank Asya under the scope of Article 70 of Turkey's banking law, only denying that one of its sources talked to the media.

The article 70 gives the BDDK the power to restrict or temporarily halt Bank Asya's operations, as well as to merge it with another bank.

Bank Asya's profits and capital base have collapsed since December, when it came under attack by the government due to its affiliation with the Gülen movement.

Last month, the government cancelled tax collection and social security contracts with Bank Asya, a move seen by observers as an attempt to weaken the lender.

The BDDK's statement came nearly five days after the news reports, seriously damaging the reputation of the bank. It added that it is up to the bank to care for its reputation, not the watchdog's duty.

Published on Today's Zaman, 10 September 2014, Wednesday