Mon, Jun 01, 2015 - Page 15 News List

Turkey denies takeover of bank was political step

Reuters, ISTANBUL, Turkey

Turkish Deputy Prime Minister Ali Babacan on Saturday said the takeover by regulators of Bank Asya was not political and that the Islamic lender would continue operating while sale or merger options were investigated.

Turkey’s Banking Regulation and Supervision Agency, known by its Turkish acronym BDDK, on Friday said that Bank Asya, caught up in a feud between President Tayyip Erdogan and US-based Muslim cleric Fethullah Gulen, posed a danger to the stability of the financial system.

It handed over control of the bank to Turkey’s Savings Deposit Insurance Fund (TMSF), which is responsible for dealing with troubled banks.

“The bank continues to be active, it is not shut down. It’s just that the TMSF from now on exercises shareholder and ownership rights,” Babacan said in an interview on Turkey’s Kanal 7 television. “And it does this with a view to either partially or entirely handing it over, selling it or merging it.”

The BDDK in February took management control of Bank Asya, citing its failure to meet legal criteria. The move prompted accusations of political meddling that could hurt the country’s reputation with international investors.

The action began after a run on deposits at the bank last year when it became embroiled in the struggle between Erdogan and Gulen, whose followers set up the bank. Erdogan accuses Gulen of trying to unseat him, something the cleric denies.

Friday’s move came just over a week ahead of a parliamentary election.

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