(Bloomberg) -- Turkey is planning to limit the amount of time companies in trouble can be shielded from debt repayments, a welcome step for the nation’s banks facing a wave of debt restructuring requests after last year’s recession.
The Treasury and Finance Ministry is working on the necessary regulatory changes to lower the so-called concordat period from the current ceiling of 23 months, according to a person with direct knowledge of the matter.
The period will be capped at six months to a year, the person said, asking not to be identified as the plan has yet to be made public.
The ministry declined to comment.
The plan highlights the ministry’s efforts to help banks clear their balance sheets from bad debt or the uncertainty of companies operating under bankruptcy protection for lengthy periods. The banking regulator is working on a related plan to help lenders drive their non-performing loan ratios after a bump this year.
Turkish corporates have come under stress following last year’s currency crash, which hit companies with foreign currency debt and tipped the economy into a recession. Banks have since seen a spike in requests to restructure debt or applications for bankruptcy protection.
Story Link: Turkey Mulls Shorter Bankruptcy Protection Period to Help Banks
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