Significant Amendments were Introduced to the Banking Law

01.06.2022
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Law No. 7407 on Amendments to the Banking Law, Certain Laws and Decree Law No. 655 ("Law") published in the Official Gazette dated 28.05.2022 and numbered 31849 introduced various amendments to the banking legislation. The amendments are briefly summarized below:

  • The funds to be insured by the Savings Deposit Insurance Fund ("SDIF") were previously regulated as "savings deposits and participation funds belonging to real persons held by credit institutions", however, the scope of these funds has been expanded as "all deposits and participation funds held by credit institutions except those belonging to official institutions, credit institutions and financial institutions". This provision enters into force on 28.08.2022.
  • Deposits and participation funds and other accounts belonging to controlling or qualified shareholders of the credit institution, legal entities that are under the control of these, mother, father, spouse and children under custody of the real person controlling shareholders, chairman or members of board of directors’ of managers’ of the credit institution, general manager or its assistants and legal entities and partnerships controlled individually or jointly by those, and their mother, father, spouse and children under custody are excluded from the insurance scope.
  • Pursuant to the amendments, the targeted minimum level of the deposit insurance reserve shall be determined by the SDIF Board. This provision enters into force on 28.08.2022.
  • Credit institutions are now obliged to provide the SDIF with all kinds of information on insured deposits and participation funds and to establish the necessary systems. This provision enters into force on 28.08.2022.
  • Changes on the administrative structure of the SDIF are introduced. In this context, new chambers and directorates will be established within the SDIF.
  • The SDIF shall be able to freely use the resources allocated to SDIF within the framework of the procedures and principles set out in the Banking Law No. 5411 ("Banking Law") to the extent required by the Banking Law and other relevant laws and the duties and powers assigned by the Presidency regarding the litigation of international lawsuits filed against the State.
  • The Law also includes several changes on the powers for the collection of SDIF receivables and the tender procedures. For instance, various conditions have been introduced for the payment of past debts, which SDIF Board is authorized to pay from the tender price or have the tender buyer pay.
  • Finally, the newly added Provisional Article 34 lists the persons who will not be entitled to a share in the distribution of the liquidation balance to shareholders (in case any remains) after the fulfillment of all legal obligations in banks, whose liquidation is carried out by the SDIF (e.g. controlling shareholders and executives of the bank, subsidiaries, shareholders who have the preferred right to appoint board members and to control). The Law regulates that the shares of these persons shall be paid to the Treasury. 

Except for the provisions stated to enter into force on 28.08.2022, the remaining provisions shall enter into force on the date of publication, 28.05.2022.

You may find the full text of the Law here (Turkish).

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