Shortly before the International Monetary Fund was expected to endorse a 4 billion US dollars stand-by loan to Ankara, Turkey's economic officials took over management of five troubled banks.

Turkish Treasury Ministry announced in a statement that the Central Bank's Savings Deposit Insurance Fund (SDIF) seized all shares and managements of five small-to-medium-sized private lenders, including Esbank, Yasarbank, Egebank, Yurtbank and Sumerbank, the Anatolia News Agency reported on Thursday.

The statement said that "in a step parallel with changes in banking legislation, measures are being taken to eliminate the problems in the financial structures of these banks."

The government immediately appointed new managers and board members for all five banks. In a separate decision, the government cancelled the banking license to a small investment bank.

Turkish Prime Minister Bulent Ecevit said the banks will continue their operations without interruption and under governmental management.

"No deposit-holder should worry. The decision was made to rehabilitate the five banks," he said.

The Treasury Ministry said the takeovers were made necessary due to the weak financial conditions of the five banks, with total assets worth 1.8 quadrillion Turkish liras (3.6 billion dollars). All five banks had long been under scrutiny for failing to fulfill financial obligations.

Under the Turkish banking law, all savings deposits are covered by full state guarantee against the collapse or insolvency of banks. With the most recent takeovers, the number of banks under the disposition of the SDIF rose to eight in the country.