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Legal Alerts

Amendments to Turkish Banking Laws

Legal Alerts
Banking & Finance

Recent Development

The amendments (“Amendments“) to the Banking Law No. 5411 (“Banking Law”); the Debit Cards and Credit Cards Law No. 5464; the Financial Leasing, Factoring and Finance Companies Law No. 6361; and Consumer Protection Law No. 6502 were published in the Official Gazette on February 25, 2020 and entered into force the same date.

What’s New?

Expanding the scope of transactions considered loans

  • The Amendments aim to expand the scope of transactions considered loans by enabling the Banking Regulatory and Supervisory Authority (“BRSA“) to define new financing techniques for investment and development banks and participation banks.

Re-determination of the scopes of risk groups

  • The Amendments re-determined bank’s risk groups to include the spouses and children of individuals previously listed in a relevant bank’s risk group.
  • Banks owned by the Turkey Wealth Fund (“TWF“) or Turkey Wealth Fund Management Co. (“TWF ManCo“) will constitute an individual risk group.

Inclusion of Turkey Wealth Fund in the scope of transactions that are not subject to credit restrictions

  • Transactions with TWF, TWF ManCo or 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.

Expanding the fields of activity of development and investment banks

  • The Amendments expand the areas where development and investment banks can procure funds, and grants the BRSA more authority to determine these areas.
  • In addition to participation banks, development and investment banks will also be able to operate with interest-free methods, and the BRSA will determine the principles and procedures for these operations. Partnerships that participation banks and development and investment banks invested in to provide interest-free financing will not be considered in the risk group of the relevant bank.

Intensification of oversight and supervision in banking

  • The Amendments aim to increase the effectiveness of oversight and supervision processes and accelerate decision-making and implementation processes by having banks create prevention plans. Banks will be required to prepare prevention plans after determining any potential issues that might arise in their financial structures and their estimated response measures. Banks will submit the plans to the BRSA, and retain the prevention plans for any audits. The BRSA will have the authority to determine the principles and procedures concerning the plans’ implementations. Furthermore, the BRSA will be authorized to take the necessary measures without waiting for the implementation of the banks’ prevention plans if, in the course of its supervision, the BRSA determines an occurrence or potential occurrence of circumstances leading to disruption in the banks’ financial structures.
  • The following will be considered market manipulation: banks’ transactions and practices intended to create or increase artificial supply, demand or price formation, including exchange rates; spreading incorrect and misleading information by various means, including online media; incorrect and misleading guidance for savings account holders; performing similar transactions to mislead or manipulate transactions in financial markets; and any other transactions and practices the BRSA may determine.

Stronger protection of banking secrets

  • Banks will be prohibited from sharing client information with domestic and foreign individuals or legal entities without the client’s active request or instruction, even if an explicit consent is obtained pursuant to the Law No. 6698 on Protection of Personal Data. The BRSA will be authorized to introduce additional restrictions on the transfer of client information abroad.

Authority to determine banking fees and commissions

  • The authority of the President of the Republic is delegated to the Central Bank of the Republic of Turkey (“CBRT“) in respect of the determination of fees, expenses and commissions under any name whatsoever, collected by banks from any activity such as credits, deposits, foreign trades, transfers, cash management and credit cards.
  • The Amendments transfer certain authorities of the BRSA to the CBRT, namely the authority to determine the fees to be collected from the consumers (except for interest) regarding products or services offered to consumers by (i) banks, (ii) financial institutions that provide consumer loans, and (iii) card issuers.
  • The Amendments annul the three-month period granted to the CBRT to announce the maximum contractual and default interest rates and allows the CBRT to determine these rates at any time and intervals it deems appropriate.

Aggravation of penalties and measures within the scope of banking laws

  • The administrative fines applicable to financial institutions that are subject to the Banking Law, the Debit Cards and Credit Cards Law No. 5464, and the Financial Leasing, Factoring and Finance Companies Law increased by up to a hundredfold.

Increasing minimum capital requirements for factoring companies

  • The minimum capital required for factoring companies was increased from TRY 20 million to TRY 50 million. In addition, existing factoring companies must increase their capitals to TRY 50 million within one year from the effective date of the Amendments (the BRSA may extend this period up to two years), otherwise their licenses will be cancelled.


The Amendments introduce new tools to modernize Turkish banking laws through strengthened sectoral security and adaptation to changing conditions. Accordingly, these changes will increase market security and contribute to the growth of the Turkish banking industry.