Restriction of Credit Utilization of Companies Subject to Independent Audit
Summary: With the Decision of the Banking Regulation and Supervision Board dated 24.06.2022 and numbered 10250 (Decision), certain limitations have been introduced regarding the use of loans by companies subject to independent audit.
According to the Decree, companies subject to independent audit whose total foreign currency and foreign currency (FX) deposits, including gold, are above TRY 15 million as of the loan application date will not be granted a new cash commercial loan in TRY if their FX assets exceed 10% of the higher of their total assets according to their most recent financial statements or their net sales revenue for the last 1 year.
For companies that are obliged to prepare consolidated financial statements in accordance with the accounting and financial reporting standards published by the Public Oversight Accounting and Auditing Standards Authority, this assessment will be made on consolidated balance sheets.
On the other hand, companies whose TL equivalent of FX cash assets does not exceed TL 15 million as of the loan application date;
– To have their current FX cash assets and total assets according to their most recent financial statements and net sales revenue for the last 1 year determined by an independent audit firm,
– Declare and undertake that the TL equivalent of their FX cash assets will not exceed TL 15 million during the maturity of the loan they will utilize,
– In order to ensure the control of the said declaration and commitment by the bank, the companies must submit to the bank the current value of their FX cash assets, total assets and net sales revenue for the last 12 months as of the end of the previous month according to the balance sheet of the previous month within the first 10 business days of each month.
will be exempted from this application if they meet the conditions.
Lastly, limited to companies that are not allowed to use FX loans in accordance with the relevant legislation, Public Oversight and Audit Department of the Public Oversight and Audit Institutions (POA) should be informed that these companies have a foreign currency net position deficit within the 3-month period starting from the date of loan application to the bank, The Bank is permitted to extend TL denominated cash commercial loans to these companies only for the 3-month period following the application date, limited to the position deficit in the 3-month period following the application date, provided that they have been determined by independent audit institutions authorized by the Accounting and Auditing Standards Authority) according to the examination to be made on the most recent financial statements and that they apply to the bank with documents approved by these institutions.
The relevant Decision is available here.
Sincerely,
BİLGENER
