The Turkish authorities announced Tuesday, July 10, they had placed five struggling private banks under state control as they sought to clean up the ailing financial sector. Bayindirbank, EGS Bank, Kentbank, Tarisbank and Sitebank were all transferred to the insurance and savings fund, said a statement by the banking regulation and supervision board.
"It became unavoidable to take the necessary action with regard to these institutions, which have various problems and have not taken the required measures to clean up their financial positions," it said.
The banks were transferred to the insurance and deposit fund, where the state took over responsibility for their management while guaranteeing customers' deposits.
The regulator said it had also cancelled the licences of two investment banks, Okan Bank and Atlas Bank, due to "the weakness of their financial situation, which could not be rehabilitated".
The regulation and supervision board has taken control of 12 banks since December 1999 when new legislation ushered in rigorous supervision in a bid to bring the sector into line with international norms.
Five other banks placed under state supervision have already been merged into a sixth institution, Sumerbank.
At the end of June, Bank Ekspres, one of the banks placed under supervision, was bought by the Turkish holding company Tekfen.
Turkey, struggling with an economic crisis, agreed in May to restructure its financial sector in return for aid from the International Monetary Fund.
The authorities abandoned a floating peg between the Turkish lira and the dollar in February as they sought to halt a flight of capital. The Turkish currency has since lost about 40 percent of its value against the dollar. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com )