Cryptocurrencies were introduced to the Turkish market in July 2013 under the Law on Payment and Security Settlement Systems, Payment Services and Electronic Money. However, there are no limitations on or controls over cryptocurrencies, which is why many investors choose to invest their money in this area. While the interest in and impact of blockchain and cryptocurrencies are growing daily, the legal risks for blockchain and cryptocurrency platforms have yet to be fully understood.
In an effort to improve collateralisation options and facilitate the access of small and medium-sized businesses to financing, Parliament recently adopted a new law introducing significant changes to pledges over movable assets. The law introduces easier procedures for establishing a pledge over movable assets, such as through registration instead of transferring possession.
The Law on the Amendment of Some Laws to Improve the Investment Environment introduces new provisions regarding the issuance of cheques and bounced cheques. The omnibus act amends the Commercial Code and introduces a serial number issued by the bank and a two-dimensional barcode to the mandatory elements on cheques. Further, banks now have extended obligations regarding the opening of cheque accounts.
The recent improvement in banking regulations in the wake of the 2008 banking crisis has made it difficult for investment banks to saturate the market with toxic assets. Stronger regulations and keener implementation of such rules have been positive for the industry. The Turkish banking industry has striking parallels with global trends. However, much still needs to be done to strengthen the Turkish banking industry.
A leading credit rating institution recently reported that the Turkish banking industry has the necessary liquidity capacity to pay back short-term debts. According to the report, the quality of the credit portfolios currently held by Turkish banks will provide enough resilience against market pressures, should they arise.
Turkish banks have much better lending practices and much healthier capital adequacy rates than in the past. Nevertheless, however strong the system is at present, it is clear that 2014 will be a difficult year. Given the heavy dependence of Turkish consumers on banking credit in the form of long-term instalments, recent regulations restricting payment by instalments are expected to cause the industry to refocus.
Following the arrest of the general manager of a state bank on corruption charges, and increasing levels of concern among government officials and investigators, attention has recently focused on Turkish anti-corruption law. Macro-economic stability has been maintained in Turkey for many years, but this may be set to change as a result. It is important that bank managers and partners act quickly when they encounter corruption.
In 2001 the Turkish banking sector took similar steps to those envisaged by the Basel III Regulation and restructured its own liquidity coverage ratio along corresponding lines. If the experience of the Turkish market is anything to go by, the new Basel III Regulation might lead banks to be more selective in terms of lending practices and encourage them to work mainly with well-established corporate firms.
The impressive growth of the Turkish economy during the past decade has been paralleled by the country's banking sector. The regulatory framework to which the sector is subjected has played a prominent part in this success. The implementation of Basel III is expected to further strengthen macroeconomic stability, contributing to the transparency of the banking sector and clamping down on the grey economy.
Banks and banking transactions are a fundamental pillar of the financial world. In order to maintain confidence and credibility in banks, the protection of customers' secrets is imperative. The protection of secrets is guaranteed under the Criminal Code, the Banking Law and the Central Bank Law. Moreover, a new draft of the Law on Customer, Trade and Banking Secrets provides details of such secrets and any exceptions.
The Banking Regulation and Supervision Agency recently amended the Regulation Regarding Banks' Procurement of Support Services. The regulation sets out the principles and conditions for providing support services, as well as requirements for support service providers and service agreements signed between such providers and banks.
Once the new Code of Obligations enters into force, Turkish banks will become reluctant to accept suretyships (the most common type of personal guarantee under Turkish law). Turkish banking practice has been always to obtain the suretyship of all shareholders for loans granted to companies. The new code aims to eliminate the current tendency to provide suretyship against loan debts of bank clients
When the New Code of Obligations enters into force, Turkish banks will have to put remarkable effort into reviewing their standardised terms of contract. The rules on standardised terms of contract in the new code are mostly adopted from several EU regulations and directives regarding standardised and unfair contract terms. The new code brings a three-stage supervision process to the standardised terms of contract, which will also protect corporate clients.
Conventional banking consists of pooling surplus funds on one side of the market (ie, savings from lenders) and channelling those funds to the other side of the market which is in need of finance (ie, credits to borrowers). In this respect, as an intermediary of money flow, Islamic banking is no different. It does not mimic conventional finance, it simply is finance.
The government has prepared the draft Credit Institutions Act to replace the Banks Act, which is no longer considered capable of meeting the banking sector's requirements. The draft act is intended to modernize the banking sector and improve the regulation of financial institutions.
The Turkish government has changed the country's currency as part of its economic reform programme following a period of hyperinflation. The new Turkish lira will come into force on January 1 2005, although the old and new currencies will both be valid in 2005 as part of the transition process.
The Banking Regulation and Auditing Institution is regulated by the new Banks Act. The act defines the scope of the institution and its decision-making body, namely the Banking Regulation and Auditing Board.
A new law has established a Banking Regulation and Auditing Committee, which will ensure the smooth operation of the banking sector and protect bank customers. Its approval must be obtained before a bank or a branch of a foreign bank can be established. The committee has also set out accounting rules which all banks must follow.