IMF loans to Turkey await bank reform

ANKARA, Turkey, Jan. 25 (UPI) -- In a move expected to delay long-awaited loans from the International Monetary Fund, Turkish President Ahmet Necdet Sezer on Friday sent three articles of a bank reform law back to the Parliament for review.

The bank law is seen as key to reforming the banking sector, required by the International Monetary Fund before it releases an estimated $12 billion loan over the next three years.

Sezer rejected the three articles on constitutional technicalities, his office said. Turkey's Parliament passed the law on Jan. 11. Since then, it has been waiting for Sezer's ratification.

Economy Minister Kemal Dervis paid a two-hour visit to Sezer to explain the importance of the law. He did not make any comment after the meeting. Dervis earlier said he hoped the IMF would approve the new loan when banking reforms and investment becomes effective.

Noting that Turkey was still struggling to overcome the aftershocks of two extremely heavy financial crisis, Dervis told reporters Thursday, "We are going through a critical turning point for the success of the economic program with the help of international finance institutions."

The Turkish Parliament will have to review the rejected articles once again. The Parliament may override Sezer, if it insists on the original wording for the three articles.

It is not clear if the law can take effect before the International Monetary Fund board meets on Feb. 4.