New regulations from BRSA for credit cards and consumer loans

The Banking Regulation and Supervision Agency (BRSA) has introduced new regulations regarding the restructuring of credit card and consumer loan debts. This regulation expands the scope and requirements of the debt restructuring process.

The decision allows for the restructuring of individual credit card and consumer loan debts for up to 48 months. Individual customers wishing to benefit from the restructuring must apply within three months.

The customer groups that can benefit from the new regulation are defined as follows:

Individual credit card customers who cannot pay their period debt partially or completely,

Consumer loan customers whose principal and/or interest payments are delayed,

Previously restructured personal credit card and consumer loan customers.

As part of the restructuring process, certain restrictions have been introduced for credit cards and consumer loans. In restructuring credit card debts, the relevant banks will not increase the card limit until half of the debt is paid off. For consumer loans, no new loans will be granted for amounts exceeding the existing restructured debt.

This step was among the macroprudential regulations implemented to support financial stability. In line with this decision, the Central Bank of the Republic of Turkey (CBRT) set the maximum interest rate for credit card restructuring transactions at 3.11%.

The BRSA's new decision includes significant changes compared to previous practices. In terms of credit card restructuring, not only cardholders who cannot pay the minimum payment but also those who are partially or fully unable to pay their outstanding balance will now be eligible for restructuring. For consumer loans, the default period requirement was set at "exceeding 30 days," but the new decision now includes all types of overdue payments within the scope of restructuring.

Additionally, the debt balance used as the basis for restructuring for both credit cards and consumer loans has been changed. Previously, the debt balance as of the decision date was taken into account, but now the restructuring balance will be used. Loans that had been restructured prior to the decision date, even if there were no delays, can now be restructured.