Code encourages cash parking for long dues

ANKARA - Hürriyet Daily News

Savings will support the Turkish financial system Deputy PM Babacan says. DHA photo

A new banking regulation trying to increase savings will help boost one-year maturity deposits, Deputy Prime Minister Ali Babacan said yesterday.

The new code, which was published in the Official Gazette yesterday, differentiates the income tax on deposits according to their maturity, encouraging longer-term operations.

Accordingly an 18 percent taxation will be implemented on six-month deposits as the rate falls to 15 percent for ones up to 12 months. The rate for longer-term parking is 13 percent.

The longer term saving deposits in banks and longer term debts by the private sector will support the financial stability in the country, Babacan said yesterday in a written statement.

Ease on earlywithdrawals

A gradual expansion of due dates of public sector debt has made the debt structure stronger against global shocks, Babacan said.

“Thus, both the liquidity risks for companies will be reduced and an additional improvement will be seen in the foreign exchange reserve’s ratio to meet short-term foreign debt,” the deputy prime minister said.
Furthermore, the code also eases withdrawals before the due date in a bid to fight hesitations about long-term parking.