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Legal Alerts

Steps Towards Normalization: Asset Ratio Revised

Legal Alerts
Banking & Finance
Financial Institutions

What’s New? 

The Banking Regulatory and Supervisory Authority (”BRSA”) amended the asset ratio (“AR“) set out for deposit and participation banks with its decision dated September 28, 2020 and No. 9170 (“Decision“).

Recent Development

The BRSA revised the monthly average AR for a relevant month to 90% for deposit banks and 70% for participation banks, a decrease from 95% and 75%, respectively. Banks will calculate their monthly average AR as follows:

Asset Ratio (AR) = [Loans + (Securities x 0.75) + (Central Bank Swaps x 0.5)] / [TRY Deposit + (FX Deposit x 1.75)]

Deposit banks and participation banks that fail to meet the AR of 90% and 75% will be subject to an administrative fine ranging between TRY 500,000 and up to 5% of the shortfall (i.e. the AR set by the BRSA minus the achieved AR in the relevant month), pursuant to Article 148/1(a) of the Banking Law No. 5411.


The BRSA firstly determined the AR in April 2020 to minimize the economic effects of the COVID-19 outbreak by incentivizing banks to augment their loan issuances. As part of the normalization process, the BRSA softened the AR requirements through its Decision.