08.07.2022/52
A New Decision Regarding Credit Restrictions Has Been Published by the BRSA
With the Decision No. 10250 dated 24.06.2022 from the Banking Regulation and Supervision Agency (BRSA), certain restrictions were placed on the credit use of companies subject to independent auditing, and explanations regarding this were provided in our circular No. 42 dated 27.06.2022.
This time, the BRSA published a new Decision No. 10265 on 07.07.2022, with new explanations and regulations regarding the application.
The important points of the new BRSA Decision are summarized below:
– When determining whether companies subject to independent auditing are subject to credit restrictions, the most recent financial statements submitted to the tax office (including temporary tax periods) prepared in accordance with the Tax Procedure Law (VUK) and related regulations will be considered.
– The foreign currency (FX) assets of companies, including gold, foreign exchange deposits in banks, securities/stocks issued in foreign currencies by domestic or foreign residents other than Eurobonds issued by the Republic of Turkey, assets consisting of shares of exchange-traded funds (ETFs) tracking gold or foreign currencies or their related indexes, reverse repo transactions in foreign currencies with foreign residents, and FX assets provided to banks (including gold) for obtaining Turkish Lira (TL) in the spot market will be taken into account in calculations.
– For companies required to prepare consolidated financial statements, the most recent consolidated financial statements audited by independent audit firms will be considered.
– The evaluation for companies required to prepare consolidated financial statements will be made excluding the company’s foreign subsidiaries and affiliates.
– In the calculation of total FX liquid assets for companies subject to consolidation, the FX liquid assets of their domestic subsidiaries and affiliates, other than banks and financial institutions, will also be included.
– In this framework, if it is determined that a company (parent company) is not eligible for TL loans under this Decision based on its consolidated financial statements, the credit restriction will only apply to the parent company, and for loans to the parent company’s other consolidated subsidiaries and affiliates, the provisions of this Decision will be considered separately for each affiliate to determine whether they are subject to credit restrictions.
– Companies that are not eligible to use credit in foreign currency according to the relevant legislation can obtain TL cash commercial credit only for the amount of their declared net foreign currency position deficit and only within the 3-month period following their application, provided that they declare their foreign currency net position deficit and the amount of the deficit. The accuracy of the declaration regarding the foreign currency position deficit will be verified and certified by sworn financial advisors (YMM) and submitted to the bank.
– Companies subject to independent auditing but whose auditing obligation will start for the first time at the end of 2022 will be exempt from this Decision.
– For companies eligible to use TL cash commercial credit under this Decision, their declarations and commitments will be confirmed and certified by independent audit firms or sworn financial advisors (YMM) in accordance with the procedures and principles specified in the Decision, by the last business day of the month following each 3-month calendar period after 30.06.2022.
You can access the relevant BRSA Decision here.
Best regards,
BİLGENER
