27.06.2022/42
Restrictions on Credit Use for Companies Subject to Independent Audit
Summary: With the decision of the Banking Regulation and Supervision Board dated 24.06.2022 and numbered 10250 (Decision), some restrictions have been introduced regarding the credit use of companies subject to independent audit.
According to the Decision, for companies subject to independent audit, whose total foreign currency (FX) deposits, including gold, exceed 15 million TRY as of the credit application date, if their FX assets exceed 10% of the total assets or the larger of their most recent annual net sales revenue, a new cash commercial loan in Turkish lira (TRY) will not be granted to these companies.
For companies obligated to prepare consolidated financial statements within the framework of accounting and financial reporting standards published by the Public Oversight, Accounting and Auditing Standards Authority, this assessment will be made based on the consolidated balance sheets.
On the other hand, companies whose FX liquid assets in TRY do not exceed 15 million TRY will be exempt from this application if, as of the credit application date, they fulfill the following conditions:
– They must have their FX liquid assets, total assets based on the most recent financial statements, and the larger of their last 1-year net sales revenue verified by an independent audit firm.
– They must declare and commit that, throughout the term of the credit, their FX liquid assets in TRY will not exceed 15 million TRY.
– In order to ensure the bank’s control over this declaration and commitment, companies must submit the updated value of their FX liquid assets, total assets, and net sales revenue for the last 12 months based on the balance sheet of the previous month, within the first 10 business days of each month.
Finally, under the relevant regulations, for companies that are not eligible to use foreign currency (FX) loans, it is allowed to grant them only TRY-based cash commercial loans limited to the FX position deficit determined over the 3-month period following the application date, provided they meet the following conditions:
– Within 3 months of the application date, they must have an FX net position deficit, which will be verified by an independent audit firm authorized by the Public Oversight, Accounting and Auditing Standards Authority, based on their most recent financial statements.
– They must apply to the bank with documents approved by the audit firms confirming this deficit.
You can access the relevant Decision here.
Best regards,
BİLGENER
