Istanbul: Turkey has taken control of Bank Asya, the Islamic lender caught up in a feud between President Tayyip Erdogan and his ally-turned-foe, US-based Muslim cleric Fethullah Gulen.

The action by Turkey’s banking regulatory authorities follows a run on deposits at Bank Asya last year when the lender became embroiled in the power struggle between Erdogan and Gulen, whose followers had set up the bank.

Turkey’s Banking Regulation and Supervision Agency cited insufficient transparency to allow for proper regulation of the bank as the reason for its move to take control.

“The institution has not presented a partnership structure that is transparent and open enough to allow for effective regulation,” the regulator said in a statement on its website.

Bank Asya said in a statement on Wednesday that its operations would not be affected.

Islamic lenders’ association general secretary Osman Akyuz told Reuters the action would not create systemic risk for the banking sector.

Shares in other companies linked to Gulen’s followers tumbled on Wednesday. Gold miner Koza Altn fell 6.5 per cent, mining company Koza Madencilik dropped 4.2 per cent and energy firm Ipek Dogal Enerji was 3.1 per cent lower.

The main Istanbul share index fell 0.9 per cent, with banks down 1.3 per cent, also pressured by the central bank’s decision on Tuesday not to hold an early policy meeting to cut rates.

“Uncertainty regarding the future of the bank continues.

Good news: the bank will continue to run its day to day operations under the control of the TMSF,” Is Investment said in a note, referring to the Savings Deposit Insurance Fund.

“Bad news: uncertainty regarding the future of its ownership is likely to weigh on the stock performance in the near-term,” it said.

Bank Asya depositors, including state-owned firms and institutions, last year withdrew 4 billion lira ($1.7 billion), or some 20 per cent of its deposits, according to media reports.

Bank Asya shares were moved to the Istanbul Stock Exchange’s watchlist companies market in September, where companies are kept under surveillance. The shares are allowed to trade for a limited time each day.

In November, Bank Asya cut a third of its workforce in November and more than a quarter of its branches in an turnaround attempt.

Turkish media reported on Tuesday that Turkey had cancelled Gulen’s passport in a further escalation of Erdogan’s campaign against the cleric who has lived in self-imposed exile in Pennsylvania since 1999.

Police thought to be close to Gulen’s network in late 2013 leaked an investigation into high-level corruption that implicated members of then-prime minister Erdogan’s family and his cabinet. Erdogan described the investigation as a coup plot aimed at unseating his party, which has been in power since 2002.