Turkish Banking Regulation and Supervision Authority ("BRSA") amended Article 8(4) of the Regulation on Operations of Banks Subject to Permission and Indirect Shareholding ("Regulation") and the amendment has been published in the Official Gazette dated 9 June 2017 and numbered 30091.
Under Article 13 of the Banking Law1 ("Law") banks, which are already incorporated in Turkey2, are free to set up branch offices inside Turkey provided that they notify the BRSA of the set up and comply with the principles set forth by the BRSA. In line with this provision of the Law, under amended Article 8(4) of the Regulation, banks will be free to set up branch offices on the condition that (i) they notify the BRSA of the transaction at least 30 business days before the set-up date and (ii) no negative opinion is reported to the bank after the conclusion of the evaluations to be made by the BRSA in line with the provision of Article 8(2) of the Regulation3. In the calculation and implementation of 30 business days, the actual opening date of the bank branch will be taken into consideration. It is mandatory that the BRSA should be notified of the address of the branch office within 15 business days from the actual opening date.
It is the bank responsibility to take necessary security precautions in their branch offices by evaluating factors like size of the branch office, volume of transactions, physical conditions and the special security commission decision of the region or the city that the branch is located. It is imperative that the bank decisions considering the taking of security measures be made in writing and justified.
It is obligatory to attach a document to the notifications sent to the BRSA evidencing that the financial activity permission certificate fee (finansal faaliyet izin belgesi) is duly paid up in accordance with the Law No: 492 on Fees.
Lastly, in the event that the branch, which is declared to be set-up but not opened up within 6 months, starts operations at the end of the 6 months period, then a new notification should be made to the BRSA.
For the full text of the Regulation (only available in Turkish) please click here.
1 Law No: 5411 on Banking Law published in the Official Gazette dated 1 November 2005 and numbered 25983
2 Under Article 6 of the Law, banks which are not incorporated in Turkey, should apply to BRSA for an activity permit for their first branch offices or rep-offices in Turkey, and setting up of such branch offices are subject to Article 9 of the Regulation.
3 Article 8(2) of the Regulation requires that the banks
will not be allowed to set up a new branch in any manner if
(i) the standard rates imposed in accordance with the protective provisions of the Law are not satisfied, (ii) the internal systems of the branch that will be set-up are found to be inadequate as a result of the inspections made and
(iii) the bank failed to provide a convincing report showing the measures to be taken to remedy such deficiencies.
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.