Law Amending Banking Law and Some Laws No: 7222, which amends some articles of the Banking Law No. 5411, Debit Cards and Credit Cards Law No. 5464, Financial Leasing, Factoring and Financing Companies Law No. 6361 and Capital Market Law No. 6362, (“Law”) has been published in the Official Gazette dated 25.02.2020 and numbered 31050.
The amendments made to the aforementioned Law and the Banking Law, Bank Cards and Credit Cards Law and Financial Leasing, Factoring and Financing Companies Law briefly as follows:
- The scope of financing methods, considered as credit, of development and investment banks has been extended. In addition, the Banking Regulation and Supervision Agency (“BRSA”) has been authorized to determine the financing methods as credit which are employed by the development and investment banks and participation banks, in case no regulation has been implemented by the Law.
- The scope of banks’ risk groups has been extended; deputy general managers, those possess the same or higher positions with deputy general managers in terms of their authority and duties even if they are employed with other titles and the spouses and children of those in the risk group are also included. Furthermore, banks owned by Turkey Wealth Fund, Turkey Wealth Fund Management Joint Stock Company, or their sub-funds are also being included in the risk group.
- Transactions made with Turkey Wealth Fund, Turkey Wealth Fund Management Joint Stock Company or with their sub-funds, as well as bonds, other securities and similar debt instruments issued or guaranteed by these institutions will not be subject to credit restrictions.
- Areas where development and investment banks can obtain funds are expanded, however, BRSA has been authorized to determine these areas and make arrangements regarding them. On the other hand, after the shareholder statement, it is stated that funding can be provided from qualified shareholders or shareholders who have the privilege to appoint members to the audit committee.
- The provision which set forth that shares of the banks in a partnership other than credit institutions and financial institutions shall not exceed fifteen percent of their own equity, and the total amount of shares in these partnerships shall not exceed sixty percent of their own equity has been abolished. In this context, the provision which set forth that banks shall not be a shareholder directly or indirectly in partnerships and institutions which are directly or indirectly has shares in them, shall not accept their stock certificates as a pledge and shall not give advance in return has been abolished.
- The provision which states that the net book values of banks ‘real estates shall not exceed fifty percent of their equity has been abolished. In addition, the provision which indicates that banks shall not be dealt with the purchase and sale of real estate and commodities for trade purposes and that it shall not participate in partnerships which execute business activity as real estate trade, except for the mortgaged housing finance institution and real estate investment partnerships, has been abolished.
- It is set forth that banks which are determined to be systemically important by the BRSA shall prepare a prevention plan and send it to the BRSA within the framework of the procedures and principles to be determined by the BRSA for the purposes of determining the precautions to be taken due to the incompliance with the protective provisions in the regulations, or in case of any possible occurrence in case of deterioration of their financial structures. As a result of the audits carried out, if it is determined that the situations that will cause deterioration in the financial structure or the probability are determined, BRSA has been authorized to take the required precautions without waiting for the implementation of the prevention plans by the bank.
- Apart from the exceptions specified in Article 73 of the Banking Law, even though the explicit consent of the customer is obtained under the Personal Data Protection Law (“PDPL”) numbered 6698, personal data shall not be shared and transferred to third parties at home and abroad without a request or instruction from him/her. In addition, as a result of the evaluation made by the BRSA regarding economic security, BRSA is authorized to prohibit the sharing or transfer of any data that is customer secret or bank secret with third parties abroad, as well as to decide on the domestic use of the information systems used by banks and their backups. In accordance with the PDPL, the criteria of proportionality and expediency were also introduced for the sharing of customer secrets.
- It is ensured by the Law that BRSA is authorised to determine making transactions and practices by the banks in order to ensure price formation including artificial supply, demand or exchange rate in financial markets, spreading information, false and misleading information with different tools including the internet, directing the savers in a false and misleading way or providing this purpose or performing similar transactions and practices as manipulations and misleading transactions in financial markets and which transactions and practices will be covered by this article. On the other hand, amendment made to Article 146 of the Banking Law indicates that in case of violation, an administrative fine shall be imposed up to 5% of the previous year’s total banking service revenues against those who violate this Article.
- Central Bank of the Republic of Turkey (“Central Bank”), instead of the President, has been authorized to determine maximum interest rates to be applied in the lending transactions and deposit acceptance of banks, the rates of participation in profit and loss in participation accounts, the qualities and maximum amounts or rates of fees, expenses, commissions and other benefits to be obtained from all transactions including special current accounts and partially or completely release of these.
- Administrative fines for the persons subject to Banking Law, Bank Cards and Credit Cards Law and Financial Leasing, Factoring and Financing Companies Law increased with the amendments.
- It is aimed to strengthen the capital structures of factoring companies by increasing the amount of capital to be paid during the establishment of factoring companies in cash from twenty million Turkish Liras to fifty million Turkish Liras. In addition, it has been provided that existing factoring companies will increase their minimum paid capital to fifty million Turkish Liras within one year from the effective date of the law proposal and BRSA has been authorized to extend this period for not more than two years.
This Law came into force on the date of publication (25 February 2020).