Turkish authorities take over Islamic lender Bank Asya

REUTERS

Turkish authorities said on May 29 they had decided to take over Bank Asya, the Islamic lender caught up in a feud between President Tayyip Erdoğan and U.S.-based Muslim cleric Fethullah Gülen.The move was announced by the banking watchdog BDDK, just over a week ahead of a parliamentary election. It followed an earlier decision by the BDDK to take management control of the bank, citing its failure to meet legal criteria.The action was launched after a run on deposits at Bank Asya last year when it became embroiled in the power struggle between Erdoğan and Gülen, whose followers had set up the bank.The BDDK statement said it acted as "problems experienced in the bank's activities with its financial structure, its partnership and management make-up presented a danger ... in terms of confidence and stability in the financial system."It handed over control of the bank to Turkey's Savings Deposit Insurance Fund (TMSF), which is responsible for dealing with troubled banks.Turkey's move to seize management control of the bank in February had prompted accusations of political meddling that could hurt the country's reputation with international investors.