İşbank to cut interests for urban renovation

ISTANBUL - Anatolian News Agency

İşbank is to become the first Turkish bank to sign a protocol with the Urbanization Ministry to cut interest rates in the interests as part of a nationwide urban renewal project.

The bank will slash the interest rates of credits targeting the reconstruction of risky buildings or ones in risky areas, charging 4 percent for housing loans and 3 percent for office loans. 

The protocol was presented on Jan. 19 to the public at a ceremony attended by Environment and Urban Planning Minister Erdoğan Bayraktar, İşbank General Manager Adnan Bali and sector representatives.

High costs
There are 14 million houses in Turkey and 6.5 million of them need to be renovated, which requires 500 billion Turkish liras in funding, Bali said. “Therefore, seeking foreign funds and different financial resources and products are musts.”

Bali added that he hopes competetion among banks will contribute to provide necessary amount.
With the loan model, which will be in effect until Dec. 31, 2013, the bank will provide long-term and lower-cost funds for the owners of risky buildings.

In addition to the government subsidy, the monthly interest rate within a 0.45- to 0.50-percent band can be applied to loans obtained by İşbank over a 10-year term.

Bali said that banks will act picky during choosing projects, in behalf of customers as well.