VKF_FRAE_2018_uyg11

VakıfBank Annual Report 2018 115 first two hundred loans in terms of amount with their justifications and make them available for audit. Additionally, loans that are classified pursuant to this Regulation must be monitored according to their reference in the accounts determined in the Communiqué on Uniform Chart of Accounts and Prospectus published in the Official Gazette dated 20.09.2017, numbered 30186. A regulation was issued in the Official Gazette dated 24 June 2018, numbered 30458, following the Council of Ministers’ Resolution numbered 2018/11828, on “Definition, Properties and Classification of Small and Medium Sized Enterprises.” With this regulation, for an enterprise to be classified as an SME, the net annual sales turnover or the cap for the financial balance sheet was raised from TL 40,000,000 to TL 125,000,000. For an enterprise to be classified as a micro enterprise, the related cap was raised from TL 1,000,000 to TL 3,000,000. For small enterprises, it was raised from TL 8,000,000 to TL 25,000,000, and for medium sized enterprises from TL 40,000,000 to TL 125,000,000. Additional amendments and changes were also made by the Regulation regarding the data to be considered in classification of enterprises. Pursuant to the Regulation on “Amendment to the Regulation on the Banks’ Loan Transactions,” published in the Official Gazette dated 15 August 2018, numbered 30510, maturity of consumer loans may not exceed thirty six months, maturity of vehicle loans and loans where the collateral is a vehicle may not exceed forty eight months, maturity of loans extended for purchase of mobile phones, tablets and computers may not exceed six months, and the same maturity limitations shall apply in restructuring these loans. However, loans extended to consumers for household purchases and for purchases of goods and services in connection with household renovations provided that renovation is made for the integral parts of the house according to Article 684 of Turkish Civil Code numbered 4721 dated 22.11.2001, leasing of houses to consumers through financial leasing, loans for other real estates, loans for financing tuition fees, loans for financing debt to public entities and institutions extended on the condition of direct repayment to the account of the same, and loans extended for refinancing of these loans, are in included in the scope of the Regulation. It is also stipulated that; if the debtor of a retail loan extended before 01.09.2018 requests that the remainder of the debt be restructured in one year following 01.09.2018, it may be restructured with a maturity no longer than forty eight months; and in the event that an additional loan is extended to the debtor for the purposes of restructuring, the maturity of such additional loan may not exceed thirty six months. “The Decree numbered 2018/11185 on the Amendment to the Decree Numbered 32 on Protection of the Value of Turkish Currency” was published in the Official Gazette numbered 30312 on January 25, 2018. The Decree prohibits extension of foreign currency indexed loans to the residents of Turkey and utilization by the residents of Turkey of loans in foreign currency from domestic or international institutions. The Decree governs matters including prohibition on extension of foreign currency loans by domestic institutions to the Turkish residents who do not generate income in foreign currency in cases other than certain exceptions, and allowing those residents not engaged in exports and service activities generating income in foreign currency to borrow loans in foreign currency from domestic institutions if their loan balance is more than USD 15 million. Additionally, Leasing, Factoring and Financing Companies are allowed to borrow foreign currency loans domestically from banks and from each other without any limitations on the amount and maturity. Public entities and institutions are allowed to utilize foreign currency loans from banks and leasing, factoring and financing companies registered in Turkey, without any limitations on the amount and maturity. The Decree includes provisions on allowing persons generating foreign currency income to utilize loans in FC domestically subject to certain conditions and to borrow the same from international institutions subject to certain conditions, in addition to other matters governed by the same Decree. The Communiqué on the “Amendment on the Communiqué (No: 2013/15) on Reserve Requirements” was published in the Official Gazette dated 9 August 2018 with numbered 30504, according to which maximum 40 per cent of mandatory reserves to be held for Turkish Lira liabilities are allowed to be kept in frozen accounts denominated in US Dollar and/or Euro, over the total amount multiplied by coefficients described for the reserves equal to the percentiles stated in the Communiqué. Pursuant to the Turkish Central Bank’s press release numbered 2018-32 dated August 13, 2018 on Reserve Requirements, reserve requirement ratios for Turkish Lira liabilities were reduced by 250 basis points for all maturity brackets; reserve requirement ratios for non-core foreign exchange liabilities were reduced by 400 basis points for the maturities described in the Press Release; the maximum average maintenance facility for foreign exchange liabilities was raised to 8%; and in addition to US dollars, Euro can be used for the maintenance against Turkish lira reserves under the Reserve Options Mechanism. The Communiqué numbered 2018/8 issued in the Official Gazette dated 22 December 2018, numbered 30633 on “Amendment on the Communiqué (No: 2013/15) on Reserve Requirements” stipulates that funds obtained by banks from Borsa Istanbul (BİST) markets via repo transactions will no longer be considered among TL and foreign exchange liabilities that are subject to reserve requirements. However, funds obtained via repo transactions executed in over-the- counter or other markets will continue to be subject to reserve requirements. The Law on Protection of Personal Data numbered 6698 was enacted with the aim of protecting privacy of individuals and their fundamental rights and freedoms. The Law also governs the obligations, procedures and principles that apply to the real and legal entities processing personal data. OTHER INFORMATION RELATED TO THE BANK AND ITS ACTIVITIES There are no lawsuits filed against the Bank which could affect its financial position and activities.