Turkish Central Bank $1.6 Billion Quake Pledge Stirs Controversy
(Bloomberg) --
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Turkey’s central bank is having to defend a 30 billion-lira ($1.6 billion) donation for survivors of the country’s worst earthquake disaster in a century because it apparently bypassed the Treasury.
In comments to Hurriyet newspaper, Governor Sahap Kavcioglu said the bank drew the money from its profits and preferred a direct transfer instead of the usual practice of handing its profits over to the ministry.
The pledge — the highest made during Wednesday’s televised aid campaign — stirred controversy for using funds earmarked for the Treasury even before the central bank disclosed its profit for last year.
Read more: Turkey Marathon TV Show Raises $6 Billion for Earthquake Victims
“If we had transferred this money to the Treasury, the Treasury could have used it in another area,” Kavcioglu told Hurriyet in an interview published on Friday. “We directly allocated this share to the quake zone.”
A seven-hour show broadcast on hundreds of TV and radio channels in Turkey raised 115.1 billion liras — including donations from the central bank and domestic lenders — an amount that will go to the country’s disaster management authority, known as Afad, as well the Turkish Red Crescent, the Muslim equivalent of the Red Cross.
A presidential decree issued on Friday exempted lenders from the legal donation limit of 0.4% of equity under the nation’s banking law for quake aid.
The decree will be valid until the end of a three-month emergency rule in the quake zone, which was declared after a pair of temblors struck on Feb. 6. More than 38,000 people have been killed in Turkey and thousands more perished in neighboring Syria.
State-run banks were among lenders that made sizable donations. Ziraat Bank, Turkey’s biggest by assets, pledged 20 billion liras, while Vakifbank and Halkbank committed 12 billion liras and 7 billion liras, respectively.
--With assistance from Beril Akman.
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