Dated:January 2009
Parliament passed a bill on Thursday that will require banks to clear the credit histories of customers who have defaulted on credit card payments, checks and debt notes, allowing millions of people to have their names taken off of black lists for loans and credit cards.
The new law allows 1.92 million people who have had credit card applications denied after being labeled too risky for failing to pay their debts within a period of time determined by the card-issuing bank to apply for a new credit card. A further 499,567 people who were unable to pay their individual loans, 5.9 million with bounced checks and 3.87 million with unfulfilled debt notes will also be affected by the new law.
Speaking about the details of the new law yesterday at a press conference in Ankara, Minister of Industry and Commerce Zafer Çaglayan said in addition to the figures above, the number of credit cards with pending payments on debt is 1.22 million.
He also noted that the proportion of default on loans over total loans extended by banks is 3.6 percent and compared this figure to the 30 percent during the 2001 crisis to conclude that the conditions are much better now despite the serious global financial crisis.
The people recorded on bank black lists for unpaid debts between April 1, 2004, and July 31, 2009, will benefit from the law. Çaglayan called the law a "very important development." Although many companies and individuals are currently not in need of new loans and will probably not rush to the banks immediately after their names are removed from the black lists, the minister said these people will be relieved to not have their credit history tarnish their business image. Also, he said such people want to make sure there is no barrier before them if they one day need to ask for a loan or a credit card.
Today, the total worth of loans extended by the banks is over $370 billion. Of this, $13.2 billion was not repaid on time. In 2001, however, the total loans issued by banks equaled only $60 billion and bank customers failed to pay $18 billion of this amount on time.
News Source: http://www.todayszaman.com
