Amendment Of The Turkish Banking Law No.5411

19 March 2020

The “THE LAW ON THE AMENDMENT OF THE TURKISH BANKING LAW AND OTHER LAWS” (“The Amendment”) which amended the Banking Law No 5411 has been published on the Official Gazette dated 25/02/2020 numbered 31050 and entered into force the same date. The Amendment covers various topics such as the scope of the risk group of banks, new regulations regarding loans and administrative fines which shall be explained more in depth below.

Scope of The Amendment

The scope of the risk group of banks has been expanded to include the spouses and children of individuals previously listed in a relevant bank’s risk group.(Article 3 of the Amendment)
While the risk group of State Banks and Turkey Wealth Fund Owned Entities has been amended to include a separate risk group which includes their partners, the amendment regarding the Development and Investment Banks and Participation Banks has been the exact opposite. (Article 3 and 12 of the Amendment)
The scope of Development and Investment Banks’ transactions deemed as loans has been expanded and the Banking Regulatory and Supervisory Agency (the “BRSA”) has been given authority to further expand said scope with the emergence of new practices.(Article 2 of the Amendment)
Turkey Wealth Fund, Turkey Wealth Fund Inc. and actions taken with the funds of these organizations has been exempt from credit restrictions. (Article 4 of the Amendment)
The scope of Development and Investment Banks actions not deemed as deposits has been expanded to not include funds from loanees. (Article 5 of the Amendment)
The Central Bank of the Republic of Turkey has been authorized to determine the commissions, costs and fees arising out of actions taken by the Banks. (Article 13 of the Amendment)
With the Amendment, the Banks shall now be under the obligation to prepare a prevention plan. The BRSA has been authorized to take the necessary measures without waiting for the implementation of the banks’ prevention plans if it determines a disruption or the possibility of a disruption in the banks’ financial structures. (Article 6 of the Amendment)
In the event of a failure to implement the prevention plan or the prevention plan is deemed as ineffective the measures regulated under Articles 68-69 and 70 of the Banking Law No 5411 shall be implemented. (Article 7 of the Amendment)
The Banking Law has been amended in line with the Law on The Protection of Personal Data to include a stronger protection regarding customer secrets and banking secrets. With the amendment, even in the event of the express consent of the customer, the banks shall not be allowed to transfer said customers data with domestic and foreign individuals or legal entities without instruction and/or request. (Article 10 of the Amendment)
Article 76/A titled “Manipulation of the financial market and misleading action.” has been introduced. The BRSA has been authorized to determine the scope of the actions. Such determinations shall be published on the Official Gazette. (Article 11 of the Amendment)
Development and Investment Banks shall be able to operate with interest-free methods, and the BRSA has been given authority to determine the principles and procedures for these operations. (Article 12 of the Amendment)
The amount of administrative fees regulated under Articles 145-146 and 147 has been increased up to 100 times. The lowest of the administrative fines being 50.000 TRY and the highest being 1.000.000 TRY. (Articles 14-15-16 of the Amendment)
In the event of a practice falling under “Manipulation of the financial market” or a “misleading action within the financial market” is determined, an administrative fine shall be imposed. (Article 11 of The Amendment)
The temporary removal of the signatorial authority shall be possible in the event of an action being taken by the bank official which causes negative effects on banks. The previous version of this Article only included situations within the bank officials own bank.(Article 1 of The Amendment)
In the event of a prohibited action taking place contrary to Article 150 of the Banking Law,obtaining a decision to deny access to the website shall be possible. (Article 17 of the Amendment)

You may reach the original text of the Law on The Amendment of the Turkish Banking Law and Other Laws here.

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