1- Legislative Framework
1.1 Key Laws and Regulations
The main legislation governing the banking sector is Law No 5411 (the “Banking Law“). Other key legislative and regulatory provisions are:
- Law No 1211 on the Central Bank of the Turkish Republic;
- Law No 6362 on Capital Markets;
- Law No 6102 on the Turkish Commercial Code (TCC);
- Law No 6098 on the Turkish Code of Obligations;
- Law No 5464 on Bank Cards and Credit Cards;
- Law No 3226 on Financial Leasing;
- Law No 1567 on the Protection of the Value of the Turkish Currency;
- Law No 6493 on Payment and Security Settlement Systems, Payment Services, and Electronic Money Institutions;
- the Regulation on the Principles of Corporate Governance of Banks (the “Regulation on Corporate Governance”);
- the Regulation on the Authorised Transactions of Banks and Indirect Shareholding (the “Authorisation Regulation“); and
- the Regulation on the Directors of Banks.
The Banking Regulation and Supervision Agency (BRSA) ensures regulatory and consolidated supervisory in the Turkish banking system. Pursuant to Article 82 of the Banking Law, the BRSA is a public legal entity with administrative and financial autonomy. Accordingly, the BRSA independently fulfils the regulatory and supervisory duties and powers assigned to it by the Banking Law and related legislation. The BRSA is responsible for the regulation and operation of the activities of the institutions under its supervision, and for authorising their establishment and carrying out these functions in a safe and sound manner. The BRSA has the authority to carry out both prudential and conduct supervision and to request the institutions subject to its supervision to take the necessary measures. According to Articles 146 and 149 of the Banking Law, the BRSA is entitled to impose financial penalties and certain severe sanctions on banks. In addition, Articles 150 and 161 of the Banking Law state that shareholders and members of the board of directors can also be subject to sanctions and penalties. The BRSA acts in compliance with foreign supervisory authorities and has the authority to grant authorisation to independent audit firms, as well as valuation and rating agencies. Pursuant to Article 95 of the Banking Law, the BRSA also assesses the structure, adequacy and reliability of annual financial reports prepared by independent audit institutions.