Turkish Central Bank $1.6 billion quake pledge instigates controversy

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The Trukish central bank is forced to justify a $1.6 billion payment to survivors of the country's catastrophic earthquake, which appears to have been made without the approval of the Treasury.

Governor Sahap Kavcioglu said, as quoted by the Hurriyet daily, that the bank pulled the money from its profits and preferred a direct payment over the typical process of passing revenues to the government.

The pledge made during Wednesday's televised relief campaign sparked outrage for utilizing Treasury cash before the central bank revealed its profit for last year.

“If we had transferred this money to the Treasury, the Treasury could have used it in another area,” Kavcioglu said, as quoted by Hurriyet in an interview published on Friday. 

“We directly allocated this share to the quake zone.”

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A seven-hour event aired on hundreds of Turkish TV and radio channels earned 115.1 billion liras, including donations from the central bank and local lenders, for the Turkish disaster management authority, AFAD, as well as the Turkish Red Crescent.

It is worth noting that a presidential decree released on Friday exempted lenders from the legal donation limit of 0.4% of equity under the nation’s banking law for quake aid. 

The directive will be in effect until the end of a three-month emergency rule in the earthquake zone, which was imposed following a pair of tremors on Feb. 6. 

State-owned banks were among those who made significant contributions. Turkey's largest bank by assets, Ziraat Bank, contributed 20 billion liras, while Vakifbank and Halkbank committed 12 billion and 7 billion liras, respectively.

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