RECENT CHANGES ON REDUCTION RATIOS TO BE APPLIED ON DEPOSIT AND PARTICIPATION ACCOUNTS

Fatoş  OTÇUOĞLU

Lawyer

Reductions applied on interests paid to deposit accounts and participation accounts have been restructured by the President’s Resolution Annex numbered 53 and dated 30.08.2018 (“Resolution”). The reduction rates applied on interest yields of Turkish Lira denominated deposit accounts and dividends paid by the participation banks in return of participation accounts are decreased while such rates are increased for foreign exchange deposit and participation accounts.            

With this Resolution, disposition in terms of Turkish Lira has been aimed to be increased and promoted. New reduction rates have been amended as follows;

A. Reductions from interests applied on foreign exchange deposit accounts and dividends paid by participation banks to foreign exchange participation accounts have been,

(i) increased from 18 % to 20 % for drawing and current call accounts and term deposit accounts of 6 months (including the 6^th month),

(ii) increased from 15 % to 16 % for term deposit accounts of 1 year (including such year),

(iii) remained at 13 % for term deposit accounts of more than 1 year.

B. Reductions from interest on deposits have been,

(i) decreased from 15 % to 5 % for drawing and current call accounts and term deposit accounts of 6 months (including the 6^th month),

(ii) decreased from 12 % to 3 % for term deposit accounts of 1 year (including such year),

(iii) decreased from 10 % to 0 % for term deposit accounts of more than 1 year.

C. Reductions from dividends paid by the participation banks in participation accounts have been,

(i) decreased from 15% to 5 % for drawing and current call accounts and term deposit accounts of 6 months (including the 6^th month),

(ii) decreased from 12 % to 3 % for term deposit accounts of 1 year (including such year),

(iii) decreased from 10% to 0 % for term deposit accounts of more than 1 year.

The abovementioned amendments in such rates shall be applied on the interests and dividends to be paid to drawing and private current accounts for 3 months as of 31.08.2018. Moreover such rates will also be applied on the interests and dividends to be paid to term deposit accounts opened or renewed within three months as of 31.08.2018.