Law No. 7223 on Product Safety and Technical Regulations enters into force as of 12 March 2021
March 11, 2021Turkish Competition Authority Published Two Important Communiqués
March 22, 2021
Communiqué on Procedures and Principles Regarding Fees that can be Collected by Banks from Commercial Customers (“Communiqué”) was amended on March 1, 2021 in relation to loan utilization fees and prepayment fees to be collected from commercial customers who request prepayment for the entire loan.
I. Loan Utilization Fees
Prior to the amendment made in the Communiqué, it was regulated that the loan utilization fee, which can only be obtained from cash loans, cannot exceed 1% of the granted loan. With the amendment made, the rate is increased to 1.10%.
II. Prepayment Fees
Pursuant to the Communiqué, commercial customers can prepay some or all of the loans they use. If the commercial customer requests a prepayment for the entire loan, the bank must accept this request. In case of a prepayment request, the bank may request a prepayment fee from the commercial customer. As stated in the Implementation Guideline of Central Bank of the Turkish Republic regarding Fees that can be Collected by Banks from Commercial Customers (“Implementation Guideline”), if the entire loan is not paid, the bank may not accept the prepayment request. If the entire loan is not paid, the prepayment fee to be collected for the partial payments will be freely determined between the bank and the commercial customer.
With the amendment, a distinction is introduced regarding the prepayment fees to be collected for loans granted (i) before March 1, 2021 and (ii) as of March 1, 2021. For Turkish Lira loans, the following rates and limits regarding prepayment fee shall be calculated over the amount prepaid by the customer to the bank, which is calculated after the required deductions regarding interest and other cost elements are made.
| Before March 1, 2021 | As of March 1, 2021 | ||
| Prepayment fee cannot exceed the following rates of the amount prepaid by the customer to the bank with the required deductions made | For loans with a remaining maturity of less than 24 months | 1% | 2% |
| For loans with a remaining maturity of more than 24 months | 2% | In addition to 2%, an additional 1% for each year for the part exceeding 24 months of the remaining maturity. In the said calculation, the periods exceeding 24 months of the remaining maturity will be rounded up to a year.* | |
*Pursuant to the Implementation Guideline, for example, in case of prepayment of a Turkish Lira loan with a remaining maturity of 30 months, the maximum prepayment fee cannot exceed 3%.
As in the prepayment fees applied before March 1, 2021, a one point increase can be made to the maximum fee to be applied for Turkish Lira loans for foreign currency loans or foreign currency indexed loans as of March 1, 2021.
