BDDK Tightens Rules for Savings Finance Companies: A New Era in Liquidity and Risk Management

The Banking Regulation and Supervision Agency (BDDK), under the oversight of the Central Bank of the Republic of Turkey (TCMB), announced a sweeping regulatory package for savings finance companies; the new rules aim to curb exposure to risky assets and boost liquidity.

Scope of the Restrictions and Their Objectives

Funds accumulated in savings pools and corporate accounts may now be invested only in special current accounts in participation banks denominated in Turkish lira, participation accounts, domestic Treasury‑issued, non‑gold‑backed Turkish lira‑denominated lease certificates (sukuk), and participation‑based investment funds with risk ratings of 1 or 2. The restriction is designed to reduce systemic risk by limiting investments in higher‑risk securities.

New Liquidity Caps and Daily Balance Rule

■The daily non‑earning balance of a savings pool must not exceed 0.2 % (binde 2) of the pool’s value at the end of the previous month.

■Transfers made after the TCMB Electronic Funds Transfer (EFT) cut‑off will be counted on the next business day.

■These measures aim to curb sudden withdrawals while making liquidity management more transparent.

Revised Limits for High‑Value Contracts

■The threshold for a “high‑value” contract has been raised from 2,509,800 TRY to 5,000,000 TRY.

■For housing or roof‑type property financing, the limit increased from 6,274,500 TRY to 12,500,000 TRY.

■The total value of high‑value contracts is capped at 5 % of the period’s total contract volume; for companies established after 1 January 2025, this ratio will gradually rise to 15 % by 30 June 2027 and then settle at 10 %.

Risk‑Group and Single‑Client Contract Caps

■An individual or legal entity may sign no more than two contracts with the same savings finance company (one vehicle and one housing/roof‑type property contract).

■Maximum contract size for vehicle financing is set at 6,250,000 TRY, and for housing/roof‑type property financing at 62,500,000 TRY.

■The aggregate value of all contracts for a single client or risk group is also limited to 62,500,000 TRY.

Market and Firm‑Level Implications

■The liquidity‑preserving caps could slightly tighten short‑term credit supply from savings pools.

■An increased tilt toward participation banks may accelerate the growth of the Islamic finance sector.

■The higher limits for large contracts could provide a short‑term boost to major housing projects and vehicle financing.

■Risk‑group caps are expected to reduce concentration risk in credit allocations, bolstering overall financial stability.

Expert Analysis (Fatih Kılıç): BDDK’s overhaul sharply narrows the risk profile of savings finance firms while centralising liquidity management. A modest contraction in short‑term credit flows is likely, but the shift toward participation banks will reinforce Turkey’s Islamic finance infrastructure. Raising high‑value contract thresholds offers breathing room for large‑scale project financing, and the phased increase in the overall high‑value contract ratio gives market participants time to adapt. Overall, the new framework curtails systemic risk while keeping the low‑risk segment of the credit market vibrant.