New protocol to allow real sector to access ‘credibility’ info

ISTANBUL - Hürriyet Daily News

General Manager of the KKB Kasım Akdeniz(L), Deputy Prime Minister Babacan(C) and TOBB President Rıfat Hisarcıklıoğlu(R). AA Photo

A protocol allowing the real sector to access company records was signed between the Credit Registry Office (KKB) and the Union of Chambers and Commodity Exchanges of Turkey (TOBB) on March 1, in an aim to reduce bad checks in the market that have been a rising concern since the prison sentence against such bad checks was abolished in early 2012.

“The main question of the real sector is debt management. Company records that could only have been seen by banks are now accessible to the real sector thanks to this protocol,” General Manager of the KKB Kasım Akdeniz said at the protocol-signing ceremony. 

After the bad check law changed, the KKB launched a “check report system” and “risk report system” in order to reveal the credibility of the drawers. The KKB started to collect the data of the drawers from banks in order to provide information to their customers, the check bearers. The check reports launched in April 2012 show the banks that a drawer works with, the number of paid and unpaid checks, the signing date of the checks and all the details of a drawer’s checks. The risk reports launched in September show the drawers’ loan repayment performance, including bank names, total risk and limits, the first date and the deadline of the loan contract, as well as the number and amount of delinquency credits. Akdeniz said more than 1.2 million check reports were prepared since April, along with 256,863 risk reports, a later application.

Online report system

Akdeniz stated that the KKB submitted the reports to an online system on Jan. 17 in accordance with the directives of Prime Minister Recep Tayyip Erdoğan and Deputy Prime Minister Ali Babacan. “The ones who would like to access checks and risk reports have to be registered on the KKB’s official website,” he said, adding that this application was the first example of its kind in the world. The check bearer sends a brief text message to demand the check or risk information of the check drawer. If the drawer approves it, a summary report is sent to the mobile phones of both parties. Additionally, they are able to access details on the website. 

The KKB head said there are 11,936 members in the system, with only 91 of them companies and 11,845 people. “While real persons can be registered on the website by only their credit card, bank card or identity number, it is more complicated for companies,” he said. At this stage, the protocol comes into play to help the real sector benefit from this system. “We determined two channels: the banks (Burganbank, Halkbank, Şekerbank, TEB and Vakıfbank) and the TOBB,” he said. The KKB has opened the way to the real sector to see this information, which is necessary for risk management, he noted.

The TOBB plays an intermediary role between companies’ membership to the system and the KKB. After a company fills a KKB application form – available on the website – it brings it to one of the 81 TOBB chamber members in order to have it signed. If the TOBB verifies the signature and approves it, the membership is done. 

Speaking at the same event, TOBB President Rıfat Hisarcıklıoğlu said the company’s domestic trade volume was worth around 2.9 trillion Turkish Liras last year, and two thirds of it was future delivery. “The macro-economic instability used to be the private sector’s biggest concern, but now we have a strong defense [thanks to the protocol],” he said. 

Check usage rose by 19 pct last year

Deputy Prime Minister Babacan, who also signed the protocol, pointed out that after the abolition of prison sentences in the case of bad checks, they had said a well-functioning credit record system could solve the problem. “The amount of check usage in the market rose by 18.9 percent from 2012 to 2011, at an amount worth 350 billion liras. The rate of bad checks was at 4.63 percent, which is considered ‘reasonable,’” he said.

Babacan also stated that the problems in the United States, India and Brazil along with the European Union, which could not find substantial solutions, caused global growth below expectations in 2012, a year of uncertainty.