Turkey: Corruption Claims And Effects İn Turkish Banking Law

Last Updated: 15 January 2014
Article by Safak Herdem

The latest corruption claims in banking sector of Turkey may show considerable effects which have already started to spread several areas of the Turkish economy. With the arrestment of general manager of a state bank, all attentions draw to Turkish anti-corruption law and concerns increasing among government officials and investigators.

Impacts to the Economy

The effects of corruption claims on the economy side are quite gloomy. Following the alleged corruption claims, the value of Turkish Lira has decreased and lowered around TRY 2.15 against the USD as of 28 December 2013. Latest statements by the Central Bank made it clear that, the Bank itself will intervene and inject currency of minimum USD 450 million on a daily basis until the end of 2013 in order to rein in the upward swing of the USD. However the concerns for Turkey's future do not express itself only on the foreign currency exchange rates but on the inflation rates as well. Turkish Central Bank had envisaged an inflation rate of 5% with a margin for deviation up to 2%. Accordingly, the average annual inflation rate for 2013 is expected around 7%.

What is more significant for the banking sector is the new policy adopted by the Turkish Government, which is aiming to reduce the spending rates of credit provided by the banking sector. Moreover, the increasing costs of loan for the Central Bank due to high exchange rates and the higher interest rates for the treasury bonds inevitably means higher borrowing rates for the banks which adds an additional burden to the sector.

Although, the macro-economic stability that maintained in Turkey for many years, it has now a new aspect and effects following the alleged corruption claims. But what is important for bank managers and partners when they encounter of a corruption claim?

Pursuant to the article 67 of the Banking Law Law No 5411, the Banking Regulation and Supervision Agency should take measures if the bank's decisions, transactions and practices are in violation of this Law No:5411 and the applicable regulations and in case the Banking Regulation and Supervision Agency determines as a result of an investigation that;

  • the bank has not taken, either partially or completely, the requested remedial measures within the period given by the Banking Regulation and Supervision Agency or within maximum 12 months otherwise, or, even if taken these measures, either partially or completely, the financial structure has not been strengthened or, it is considered that it cannot be strengthened even if the measures are taken,
  • the continuation of the bank's activities will endanger the rights of the owners of deposit or participation funds as well as the security and stability of the financial system,
  • The bank has not fulfilled its obligations as they fall due,
  • The total value of liabilities of the bank exceeds the total value of its assets
  • The dominant partners or managers of the bank fraudulently use the resources of the bank directly or indirectly in their own or others' interests in such a manner that the sound operation of the bank will be at stake, thus causing a loss for the bank,

Then the Banking Regulation and Supervision Agency shall be authorized, with the affirmative votes of minimum five members, to revoke the operating license of the bank or to transfer the shareholder rights except dividends and the management and supervision of the banks to the fund, for the purposes of transferring, selling or merging them partially or fully, on the condition that the loss will be deducted from the capital of the existing partners.

The dominant partners and managers of the banks whose operating license has been revoked or which has been transferred to the Savings Deposits Insurance Fund by the reason of fraudulently use the resources of the bank directly or indirectly in their own or others' interests shall return and compensate for the resources used as well as the damages that arise from such misuse, within the time period given by the fund, by excluding the provisions of the Banking Law regarding personal liability of dominant partners and managers.

In practice, the implementation of this provision show itself as; showing bank assets as guarantee, extending loans to a person clearly has no creditability as of the loan extending date, opening deposit and such accounts in domestic and foreign banks and financial institutions, showing such accounts as guarantee can be listed as financial corruption cases. If it is determined according to the investigations by the fund that the managers and auditors a bank, or its general manager and assistant general managers, or its authorized signatory officers have caused the transfer of the bank to the Savings Deposits Insurance Fund, such person shall be held personally liable to the extent of the damage they have caused to the bank and National Courts may declare any such person's bankrupt.

The procedures for the request of repayment and compensation of resources used as well as the amounts to be repaid and compensated shall be determined by the fund within the frameworks of the investigation to be carried out by the Banking Regulation and Supervision Agency at the relevant bank.

In case of a revocation of the bank's operating license, the amounts that not repaid or compensated within the time period given by the fund shall become Fund's receivables and shall be prosecuted and collected within the framework of the provisions of the Law No. 6183 regarding the Procedures for the Collection of Public Receivables.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Safak Herdem
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.