German sanctions imposed on Turkey’s largest bank

BERLIN / ANKARA — On Thursday, the German authorities imposed economic sanctions on Ziraat Bank, Turkey’s largest and state-owned bank. According to an announcement on the Federal Financial Services Authority (BaFin) official website, the measures come after an intensive supervision process. Ziraat Bank has seven branches in Germany.

Several decisions have been taken by the BaFin regarding the well-known Turkish bank, including preventing it from granting large amounts of credit and not providing large financial loans in exchange for mortgaging the real estate of the beneficiaries of these loans in Turkey. A large financial fine was also imposed on the bank, the value of which was not disclosed by the BaFin.

The BaFin restrictions include preventing Ziraat Bank from obtaining large deposits and paying interest in the market, forcing it to provide special financial guarantees for administrative transactions that require large amounts of money, in addition to forcing it to collect funds with high interest.

Economists considered these measures equivalent to closing the bank, without an explicit decision to close it, to avoid affecting the diplomatic relations between Berlin and Ankara.

International affairs analyst Aydin Sezer ruled out that these measures would lead to a diplomatic crisis between Germany and Turkey, for the time being at least, especially since Berlin avoided the option of closing the bank entirely.

Sending money to unknown sources in Turkey is the most prominent reason for BaFin’s strict measures, especially since European countries have for years restricted the amount of money sent from their lands to several countries in the Middle East, including Turkey.