banking consultancy Turkey

Banking and Finance Law in Turkey

Above all, this article will provide a brief outline of the banking and finance law applicable in Turkey. It will also include a brief introduction section for banking consultancy Turkey. Financial turmoil across the world has had a detrimental impact upon Turkey’s economy and foreign direct investments during the last ten years. Most sectors including banking have undergone the influence of global economic problems.

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What are the Main Legal Instruments Applicable to Banking and Finance Law in Turkey?

To clarify there is no specific legislation focusing on payment and settlement systems. Despite this, it is significant to stress at the outset that there are three principal legislation with regard to banking and finance:

  • Firstly, Banking Law (Numbered 5411),
  • Secondly, Law on Financial Leasing, Factoring, Financing and Saving Financing Companies Law (Numbered 6361)
  • Thirdly, Bank Cards and Credit Cards Law (Numbered 5464).

Moreover, there are specific references to the banking system in other legislative framework and regulations. Disorganization of relevant regulations has been a matter of concern over the years in Turkey.

What is the importance of Banking Law (Numbered 5411) for Banking and Finance Law in Turkey?

Undoubtedly, Banking Law (Numbered 5411) has been at the heart of banking and finance in Turkey. Article 1 stipulates the main objective of the said Law. Its main purpose is ‘to regulate the principles and procedures of ensuring confidence and stability in financial markets, the efficient functioning of the credit system and the protection of the rights and interests of depositors’. Especially Part VII regulates key legal obligations on bankers including confidentiality, protection of reputation, ethical principles, customer rights.

What kind of activities are carried out by banks in Turkey? 

Generally speaking it is possible to address numerous banking activities in Turkey. In this context, under Article 4 of the Bank Law, banks can carry out the following activities:

  1. Accepting deposits,
  2. Accepting participation funds,
  3. Granting any sort of loan, either cash or non-cash,
  4. Carrying out any type of payment and collection transactions, including cash and deposit payment and fund transfer transactions, correspondent bank transactions, or use of check accounts,
  5. Purchasing transactions of commercial bills,
  6. Safe-keeping services,
  7. Issuing payment instruments such as credit cards, bank cards and travel checks, and executing relevant activities,
  8. Carrying out foreign exchange transactions, trading of money market instruments, trading of precious metals and stones and safekeeping such,
  9. Trading and intermediation of forward, future and option contracts, simple or complex financial instruments which involve multiple derivative instruments, based on economic and financial indicators, capital market instruments, goods, precious metals and foreign exchange,
  10. Purchase and sale of capital market instruments and repurchasing or re-sale commitments,
  11. Intermediation for issuance or public offering of capital market instruments,
  12. Transactions for trading previously issued capital market instruments for intermediation purposes,
  13. Guarantee transactions like undertaking guarantees and other liabilities in favor of other persons,
  14. Investment counseling services,
  15. Portfolio operation and management,
  16. Primary market dealing for purchase-sales transactions within the framework of liabilities assumed by contracts signed with Treasury Undersecretariat and/or Central Bank and associations of institutions,
  17. Factoring and forfeiting transactions,
  18. Intermediating fund purchase-sale transactions in the inter-bank market,
  19. Financial leasing services,
  20. Insurance agency and individual private pension fund services,
  21. Other activities to be determined by the Board.

What kind of banks can be formed in Turkey? 

Overall, it is possible to classify banks under two main groups, commercial banks and non-depository banks. Besides, we can group each part into three subgroups as state-owned, privately owned, and foreign banks in terms of source of their respective capitals.

Which authorities are responsible for the enforcement of banking and finance laws and regulations in Turkey? 

Markedly, Banking Regulation and Supervision Agency has a core mission to ensure the compliance of the banking system in line with the Banking Law and other applicable regulations. According to Article 93 of the Banking Law, the Agency is granted certain powers and duties for the implementation of the Banking Law. First part of the Article in question reads as follows:  ‘To regulate, enforce and ensure the implementation of the establishment, activities, management and organizational structure, merger, disintegration, change of shares and liquidation of banks and financial holding companies and with the reservation of the provisions of other laws and the related regulation, financial leasing, factoring and consumer financing companies, and monitor and supervise enforcement of such’.

Bearing in mind the decisions given by the Agency, it is beyond doubt to observe the importance of the role of Banking Regulation and Supervision Agency in the promotion of financial integrity and stability.

Are there any limitations for banks with foreign ownership in Turkey?

Under Article 48 of the Turkish Constitution, everyone has the freedom to work and conclude contracts in the field of his/her choice and the establishment of private enterprises is free. Taking together with Article 10 protecting the right to equality, it is remarkable to conclude that there shall not be any limitations for foreign entities in the field of banking and finance. Article 3 of the Foreign Direct Investment Law confirms this principle by indicating that foreign investors shall be subject to equal treatment with domestic investors.

Is there any specialized dispute settlement mechanism or court in Turkey for the banking sector? 

Specialized courts have been appointed by the decision of the Council of Judges and Public Prosecutors of 1230 (Official Gazette dated 30 November 2021 and numbered 31675). The mission of the court basically covers the files against crimes within the context of ‘Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions’.


To summarize this paper has aimed at identifying key legal norms in the field of banking and capital markets in Turkey. As clearly observed above, the Banking Regulation and Supervision Agency plays an essential role in the supervision of the banking system and the provision of financial market stability and integrity. Banking and finance activities are strictly controlled and monitored by the Agency. In addition to the supervisory role of the Agency, multiplicity of the banking and finance regulations requires a full-fledged legal and business support for particularly foreign investment projects in Turkey.

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