Recent development

With a presidential decision numbered 4299 and dated 14 July 2021, the effectiveness of Temporary Article 32 of the Banking Law regulating the financial restructuring transactions and related incentives and tax exemptions contemplated under the Framework Agreement has been extended for an additional two years. Please refer to the following links for our alerts on the introduction of Temporary Article 32 and the Framework Agreement:

What's new?

Temporary Article 32 of the Banking Law, which entered into force on 19 July 2019, has been the legal basis of the financial restructuring regime in Turkey for the last two years. This exceptional provision of law has facilitated financial restructuring in Turkey by excluding creditors' actions to restructure, such as term extensions, provision of new loans, partial or full write-downs and debt for equity swaps, from the scope of the crime of embezzlement. It also provides various tax exceptions to the transactions and documents to be entered into within the scope of financial restructurings.

These legal tools speeding up financial restructuring in Turkey will be available for two more years.


While there has been a significant drop in the amount of non-performing loans in the last two years, the need for financial restructuring is still there. With the extension of the term of effectiveness of Temporary Article 32, the financial restructurings that occur in accordance with the Framework Agreement will continue to enjoy the legal comforts specified above for two more years.

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