Turkey advises commercial banks not to distribute dividends in 2021 – Middle East Monitor

Turkey’s banking regulator advised commercial banks not to distribute profit dividends in 2021, when a currency crash eroded banks’ cash reserves, Bloomberg News Agency quoted informed sources.

According to the report, the sources said the regulator passed its recommendation to the banks through the Turkish Banking Association. Now the banks are waiting for an official written notice prohibiting the payment of dividends.

The Banking Regulatory Authority and the Banking Association declined to comment on this to Bloomberg, the report also said.

In Turkey, banks were allowed to pay up to 10% of their net income as dividends last year due to good risk management during the pandemic.

In 2021, jumps in inflation and declines in the value of the Turkish currency, the lira, have led opposition parties and the public to attack the government’s economic policy.

READ: Turkey’s economic problems can be solved through justice: opposition leader

Meanwhile, last December President Erdogan said that Turkey would never leave its political and economic future to the “prescriptions” of global economic institutions like the IMF.

The Turkish president also called for calm among the public, asking them “not to deviate from common sense” when buying foreign currency, setting prices and purchasing.

Erdogan also promised additional measures to help low-income citizens.

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