Bank of America had announced plans to charge its customers $5 per month to use a debit card. Bank of America was not the only bank planning this – it was first out of the gates. President Barack Obama quickly jumped into action. He said banks needed to make money by earning it – they had no right to a profit. He bemoaned the fact that regulators did not have the teeth to stop the banks from making such charges. He hinted that if BofA did not change its charging policy, customers had the ultimate sanction – to withdraw their business. Before long, BofA dropped its charging plans. Other banks put their own plans back in the locker and threw away the key.

Banking and politics have always been uneasy bedfellows. The relationship between state and finance has become more strained than ever before since the global financial crisis. Banks, and the people who work for them, are blamed for many of society’s ills, a cheap and easy target for politicians trying to hide their own failings as developed economies continue to flatline.

Regulation of the banking industry increasing looks as much about what is expedient for the ruling class, as it is prudent for a financial system that has been a principal driver of global trade and economic growth. But even in the era of banker-bashing, there are certain lines that have not been crossed when it comes to political interference in finance.

Except in Turkey. This month, Euromoney publishes an in-depth report on the problems facing Bank Asya, the 12th biggest bank in the country and its leading Islamic finance house.

Bank Asya’s problems – withdrawal of deposits by individual and corporate investors, the wiping out of profits, the dramatic fall in share price – are apparently nothing to do with the way the bank is run.

They are everything to do with a politically-motivated vendetta against the bank by Turkey’s president, Recep Tayyip Erdogan.

If you’re in any doubt about the vendetta, consider the rhetoric pouring forth from Turkey’s leader about the bank. He has called it ‘bankrupt’, ‘bust’ and ‘failed’ at various points over the past year. So far, Bank Asya has withstood the tirade. It continues to trade, but its ability to do so has been severely impaired.

If you’re in any doubt about the motivation, then consider this. Bank Asya is closely associated with Fatullah Gülen, the Turkish scholar and cleric. He was a supporter of Erdogan when he came to power in 2002. The two have since had a spectacular schism, with Gülen decamping to the United States.

Last December, prominent Turkish politicians and businessmen – among them, two of Erdogan’s sons – were targeted in a probe into allegations of corruption.

Erdogan immediately dismissed the probe as a conspiracy among members of Gülen’s Hizmet movement, which at the time had wide-ranging influence over Turkey’s police and judiciary. The president ordered a purge of what he labelled a ‘parallel state’.

A few days later, word began to spread that Bank Asya – which banks far more broadly than the members of Hizmet – would be a target. And the rumours and withdrawals began.

A year on, Bank Asya continues to operate under the leadership of a former senior member of Turkey’s respected banking supervisor, the BDDK, which has tried to remain impartial to Erdogan’s machinations.

But the battle for Bank Asya remains a cloud over the Turkish banking sector. It should be noted that Erdogan rose to power in the wake of the country’s banking crisis of 2001. The reforms that were undertaken under his regime after Turkey’s own crisis made its banking sector strong,and helped it to survive the global financial crisis from 2008 relatively unscathed.

Turkey’s strong banking sector has been an engine of growth for the past decade. For much of that period, Turkey looked to become a bigger player on the world stage, even pushing for membership of the EU.

The Bank Asya saga seems symptomatic of Erdogan turning Turkey back in on itself. That would be a shame.

Banks that do business in Turkey – this month, BBVA announced it wanted to take majority control of Garanti Bank – should tread with caution.

The battle for Bank Asya