Aiming to sustain domestic demand and available consumer financing, on September 27, 2016, the Turkish Banking Regulatory and Supervisory Authority (the "BRSA") relaxed its restrictions on consumer loans and credit card use and provided refinancing options for existing consumer loan debts.

To this end, the BRSA amended the Regulation on Debit and Credit Cards, theRegulation on Bank Credit Transactions, the Regulation on the Rules and Procedures for Banks to Determine Types of Loans and Other Receivables and Provisions to be Set Aside for Loans, the Regulation on Establishment and Operating Principles of Financial Leasing, Factoring and Financing Companies and the Regulation on Accounting Principles and Financial Statements of Financial Leasing, Factoring and Finance Companies.

What the BRSA did

  • The consumer loan maturity limit applicable to banks and other financial institutions is now 48 months, up from a 36-month limit.  
  • As a general rule, consumers' credit card purchases can now be made in instalment payment plans of up to 12 months, up from the previous general nine-month limit. The exceptions to the 12-months instalment limits are:  
    • purchases relating to air travel, travel agencies, transportation, accommodation, health and social services, health related goods and payments made to societies and clubs, which remain subject to a nine-month instalment limit;  
    • electronic appliances and computer purchases, which are now subject to a six-month instalment limit;  
    • jewelry purchases continue to be subject to a four-month instalment limit;  
    • no instalment payment plans using consumer credit cards can be provided for goods and services purchased abroad or the domestic purchases in relation to telecommunications, direct marketing, food and alcoholic beverages, gasoline, cosmetics and office supplies and gift cards issued without procuring a tangible item in exchange for the transaction.  
  • Corporate credit card purchases can now be made in instalment payment plans of up to 12 months, up from the previous nine-month limit.  
  • The outstanding credit card debts as of September 27, 2016, can now be restructured by banks and financial institutions for up to 72-month instalments.  
  • Mortgage loans can now be extended up to 80% of the property's value, up from a previous 75% limit.  
  • The banks' provisioning requirements relating to loans classified under Group 1 (Loans of a Standard Nature and Other Receivables) and Group 2 loans (Closely Monitored Loans and Other Receivables) are simplified to allow banks to set aside fewer provisions.  
  • The finance companies' provisioning requirements for consumer loans (other than mortgage loans) have been relaxed. A finance company must now set aside (i) 1% of the outstanding consumer loans for general provisions for loans not in default or in default less than 30 days, down from  4%, and (ii) 2% for loans which are in default for 30 to 90 days, down from  8%.


The BRSA targets to maintain consumer demand at its previous levels by allowing for more instalments and refinancing options; maintaining the consumer demand level is essential, as it is a key driver in Turkey's growth. With these changes, the domestic demand is expected to be sustained while the BRSA keeps a tiered restriction system on instalment plans to prevent a potential increase in Turkey's current account deficit.