Central Bank Changed Prepayment Fees

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The Communiqué stipulated that if the corporate client requested prepay for the aggregate amount of the loans, the bank was obliged to accept this request, and in this case, a prepayment fee to be calculated over the aggregate amount of the loans that are prepaid by making the necessary deductions for interest and other costs. Accordingly, different rates were determined for this calculation, depending on (i) whether or not the remaining maturity of the loan exceeds twenty-four months, and (ii) whether the loan is denominated in Turkish lira or foreign currency or indexed to foreign currency.

The Amending Communiqué introduces a difference in the calculation of the prepayment fee in terms of fixed-rate and floating-rate loans.

Within this scope, for fixed-rate loans, prepayment fee can be charged on the aggregate amount of the loans that are prepaid, not exceeding the loan interest rate and the remaining weighted average maturity for Turkish lira loans, and the rate calculated by the formula determined by the Prescription of the Central Bank of the Republic of Türkiye based on a fixed rate and the remaining weighted average maturity for foreign currency or foreign currency-indexed loans.

For floating-rate loans, prepayment fee of up to two per cent of the aggregate amount of the loans can be charged.

The Amendment Communiqué also introduces different calculation procedures for the fees to be charged for prepayment of loans utilized before March 1, 2021 and between March 1, 2021 and June 30, 2024 (inclusive).

In this context, among the loans utilized before March 1, 2021, for loans denominated in Turkish lira, the prepayment fee will not exceed for loans with a remaining maturity not exceeding twenty-four months one per cent, and for loans with a remaining maturity exceeding twenty-four months two per cent of the aggregate amount of the loans.

For loans denominated in foreign currency or indexed to foreign currency, the abovementioned maximum fees shall be increased by one percentage point.

Among the loans utilized from March 1, 2021 to June 30, 2024 (inclusive), for Turkish lira loans, a prepayment fee can be charged for loans with a remaining maturity not exceeding twenty-four months, up to two per cent of the prepaid amount and up to the amount calculated by increasing one per cent for each year of the remaining maturity exceeding twenty-four months above two per cent for loans with a remaining maturity exceeding twenty-four months.

In this calculation, the periods exceeding twenty-four months of the remaining maturity will be completed to the year.

For loans denominated in foreign currency or indexed to foreign currency, the maximum fee applied for Turkish lira loans can be increased by one percentage point.