Emlak Bank has received approval from the Turkish banking regulator to re-launch its operations in country as a participation bank.

It will focus on focus on real estate market and operate under the brand name Türkiye Emlak Katılım Bankası, according to Turkey’s official gazette.

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Emlak Bank re-entry:

Emlak Bank, which founded in 1946, was forced to liquidate in 2001 by Turkish banking regulator as a part of pledges made to International Monetary Fund (IMF).

Prior to liquidation, Emlak bank was considered a lynchpin for the Turkish building boom and allegedly financed many ill-conceived and corrupt housing projects.

Emlak Bank and other state-run lenders that were closed down in 2001 had losses of up to $20bn, according to ahvalnews.com.

Previously, the president of Turkey Recep Tayyip Erdoğan revealed plans to revive Emlak Bank to support the country’s real-estate market.

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In December last year, Turkish treasury and finance minister Berat Albayrak announced that Emlak Bank will be revived and integrated with a new system and economic model.

Albayarak said: “Emlak Bank would be integrated into a new system aimed at addressing ‘the absence of sustainability’.”

The economic growth in Turkey has been contracting, collapsing due to fall in prices leaving many builders with housing stock that could not be sold.

Ratings agencies Moody’s and Standard & Poor’s have cautioned the Turkish government regarding the financial sector policies, saying unconventional attempts to boost lending could threaten credit ratings.