Azernews.Az

By Bloomberg

Turkey’s cabinet appointed Mehmet Ali Akben, a career Islamic banker and board member at the state Savings Deposit Insurance Fund, to head the Banking Regulation and Supervision Agency, or BDDK.

The appointment was announced in Friday’s Official Gazette, filling a leadership void at the banking watchdog that’s been in place for six months. Akben said in an interview with the state- run Anadolu Agency after the appointment that he’d work to harmonize regulation with the government’s agenda.

“We’re going to have a stronger BDDK which is more supportive of production across all sectors,” Anadolu quoted Akben as saying. The banking industry will be strengthened with the addition of new Islamic banks, Anadolu cited him as saying.

Since 2011, Turkey’s banking regulator has been at the forefront of attempts to reduce the current account deficit, introducing a raft of measures to cool the pace of lending growth. The head of the banking industry body lobbied Thursday for some of those measures to be rolled back, saying they were hurting profits and risked keeping national growth below potential.

Akben formerly worked at Kuveyt Turk and Turkiye Finans, two of Turkey’s four Shariah-compliant banks, before joining the board of the Savings Deposit Insurance Fund in 2012. That fund, known in Turkish as the TMSF, is responsible for taking over failed banks and other indebted companies. In February it seized Bank Asya, an Islamic bank linked to U.S.-based Islamic preacher Fethullah Gulen, an enemy of President Recep Tayyip Erdogan.

Akben takes over as the government has placed the expansion of Islamic banking high on its economic agenda. State lenders TC Ziraat Bankasi AS, Turkiye Halk Bankasi AS and Turkiye Vakiflar Bankasi AS are all opening units that will adhere to the Islamic ban on interest. The government says it plans to almost triple the market share of Shariah-compliant banks to 15 percent within the next decade.

The banking regulator had been leaderless since November, when former chief Mukim Oztekin resigned for health reasons. Oztekin, who became chairman of the banks’ association in 2012, died May 2 following a brain operation in September.