The Central Bank of the Republic of Turkey (CBRT) has changed banks’ reserve requirement regulations to "help channel loans to productive and production-oriented sectors" and announced a series of new consumer protection measures in the banking sector to support the country’s sustainable economic growth.

"In view of the likely impacts of the recent surge in consumer loans on growth composition, inflation, current account balance and risk premium... the central bank decided to introduce some changes," the bank said in a statement Saturday.

The loan growth calculation for Turkish banks, who will benefit from reserve requirement incentives, will include loans extended to selected sectors, the bank said.

The central bank said the sectors included agriculture, forestry, fishing, mining, manufacturing, transportation, accommodation and food services, as well as information and communication sectors.

"The new practice will help channel loan supply toward productive and production-oriented sectors that will support sustainable growth, rather than consumption, affect the current account balance positively and support financial stability," the bank said.

According to the statement, banks with real annual loan growth of over 15% will be able to benefit from the new practice if their adjusted real loan growth in selected sectors is below 15%. Banks with real annual loan growth below 15% will be included if their adjusted real loan rate is above 5%.

"The revisions will take effect from the calculation period of March 6, 2020, with the maintenance period starting on March 20, 2020," the bank said.

The decision came after the CBRT said in its latest Monetary Committee Meeting that it is closely monitoring credit growth and its effect on the current account balance and inflation, signaling the use of macroprudential tools to put a brake on rising consumer loan supply. Since July, the bank has aggressively cut its key policy rate to boost recovery from the recession and has used reserves to support real sector access to loans and loan growth to manage economic growth.

New measures to cut fees that banks charge commercial clients

A series of new consumer protection measures by the Central Bank to cut or lower several banking fees charged on commercial customers have also been effective this week.

The CBRT said that "banks collect numerous fees, commissions and charges of the same characteristic under different names and the collected amounts are far from being comparable and might lead to overcharging."

It has limited the number of banking fees offered under the categories of "Commercial Loans," "Foreign Trade," "Cash Management" and "Payment Systems" to 51 items.

According to the new measures, the annual increase in banking fees will be based on the percentage increase in the Consumer Price Index, announced by the Turkish Statistical Institute (TÜİK). Banks will also not be able to charge fees for opening and operating and other services of deposit and participation fund accounts of commercial customers.

Credit cards that haven’t made any transactions for 180 days will be considered inactive and no annual membership fee will apply to them, the CBTR said. The central bank also set an upper limit for fees on electronic funds transfers via mobile or internet banking, which is TL 1 for a transaction amount of TL 1,000 or less. This limit is TL 2 for ATM transactions and TL 5 for transactions with other channels.

According to the new framework, the banks also need to notify customers a minimum of two business days in advance, in writing or with a call to their registered phone numbers before increasing any fees.