Bank

Scope

Article 3 of Banking Law No. 5411 defines the bank as covering deposit banks, participation banks, and development and investment banks. A deposit bank operates to accept deposits and extend credit in its own name and for its own account; a participation bank to collect funds through special current accounts and participation accounts and to extend credit; and a development and investment bank mainly to extend credit without accepting deposits or participation funds. Article 4 of the Law lists the activities banks may carry out; these include acceptance of deposits and participation funds, cash and non-cash credit, payment and fund transfers, custody, card issuance and capital market transactions. Establishing a bank depends on the permission of the Banking Regulation and Supervision Board; a bank is established as a joint-stock company and, in order to commence operations, obtains a separate operating permit from the Board (Art. 6–7, 10).

Practical significance

No person other than credit institutions, that is, deposit and participation banks and those authorized under their special laws, may accept deposits or participation funds as a regular business; nor may they use expressions in their trade name, announcements or advertisements that create this impression (Art. 60). Banks are obliged to establish an internal control, risk management and internal audit system to monitor the risks to which they are exposed (Art. 29) and are subject to obligations such as customer identification and suspicious transaction reporting under Law No. 5549.

Commonly confused concepts

A bank is confused with a payment institution and an electronic money institution. Under Law No. 6493, banks are also payment service providers; however, payment institutions and electronic money institutions are not banks, operate with permission from the Central Bank of the Republic of Türkiye, and funds they receive in return for payment services or electronic money issuance are not deemed deposits (Law No. 6493, Art. 13–14, 18, 20). In Law No. 6493, the word “Bank” specifically refers to the Central Bank of the Republic of Türkiye (Art. 3). The Central Bank is subject to Law No. 1211 and is not among the institutions listed in the scope article of Law No. 5411 (Law No. 5411, Art. 2).