Turkish banking regulator has taken over the management control of Islamic lender Bank Asya and dismissed its executives.
The country’s banking watchdog transferred 63% of the bank’s preferred shares into Turkey’s Savings Deposit Insurance Fund (TMSF), which directly answers to the prime minister.
It replaced the bank’s leadership with a new chief executive as well as board of directors.
The move follows a run on deposits at the bank last year as it was entangled in a power feud between Erdogan and Gulen, whose followers had set up the bank.
Turkish Prime Minister Ahmet Davutoglu said, "Bank Asya decision has no political dimension, it is a completely legal decision. The legal criteria are for everyone, for every company."
Davutoglu said that the lender had failed to comply by the legal criteria, which resulted in the takeover of its management by TMSF.
According to TMSF, the bank offered inadequate transparency and its takeover was meant "to protect the bank’s shareholders, clients, the banking sector and Turkish economy and prevent a new failed bank."