There are banks that have been under article 64 for more than three years without improving their situations. There are others whose balance sheets have deteriorated even further when the treasury should have seen to it that the opposite happened. There are even article 64 banks that are preparing to go public. But the most bizarre thing about these banks is that they continue to get syndicated loans from international banks although their names are well known to the banking industry.
Many article 64 inmates are happy to stay put. Coming under article 64 can have distinct advantages for a bank, such as being absolved from reserve requirements (these are 8% for Turkish lira deposits and 11% for foreign exchange) and having interest-free funds put at its disposal. Industry sources say that some banks volunteer to enter article 64 in order to enjoy these benefits.
"It is incomprehensible that these banks are allowed to park under article 64," says Akin Ongor, CEO of Garanti. "They must either be shut down or merged." Ottoman Bank CEO Aclan Acar speculates that neither happens because banking is a small, cliqueish world. "It's like a classroom," he says."We