Precautions for Turkey's Halkbank before Zarrab hearing

The Turkish authorities announced new regulations in the "merger, division, transfer of assets and exchange of bank shares" in the Official Gazette on November 16
Tuesday, 21 November 2017 22:05

As the allegations of a severe fine against some Turkish banks including Halkbank are being talked of before the Zarrab case, both the Central Bank of Iran and Turkey's Banking Regulation and Supervision Agency (BDDK) took some measures.

BDDK announced new regulations in the "merger, division, transfer of assets and exchange of bank shares" in the Official Gazette on November 16.

According to the regulation, a Turkish bank is granted the right to "transfer one or more parts of its assets to another bank without causing the dissolution of the bank". This regulation change was talked of as a measure against a possible fine against Halkbank, enabling Halbank to change its name.

Deputy Prime Minister Mehmet Şimşek on Monday denied claims that this meant Halkbank would be absorbed into another bank. 

"There is no such thing. Turkey’s banking watchdog will make the necessary explanation,” Şimşek told reporters in Ankara, referring to the BDDK. 

"There is no work to replace Halkbank. The latest regulations aren’t related to Halkbank. The regulations were done to comply with the new trade law," said Mehmet Ali Akben, the head of the BDDK.

Turkey's Deputy Prime Minister Bekir Bozdağ had commented on possible economic sanctions, saying that "Turkey is faced with a conspiracy". The shares of Halkbank fell dramatically as concerns over a severe fine against Halkbank increased.

The Iranian side has also made statements regarding the restored banking relations with Turkey.

The international relations manager of the Central Bank of Iran, Hussein Yakubi Miabder, said on November 21 that Iranian Central Bank resolved problems of bilateral banking relations with Turkey's Halkbank. Yakubi noted that Halkbank had been tough on especially two Iranian banks and the disputes had been resolved, adding that additional five Iranian banks had also made a request of financial relation with Turkish banks.

On June 21, a delegation from the Central Bank of Turkey met their Iranian counterparts in Tehran to discuss and resolve disputes of bilateral banking relations.

Iran-Turkey banking ties had been disturbed following the detention of Halkbank senior manager Mehmet Hakan Atilla's detention in the U.S in last March for violating sanctions on Iran. Atilla was accused of conspiring with Reza Zarrab to launder hundreds of millions of dollars on behalf of Iran.