Banking Activities under Turkish Law
As per the Banking Law No. 5411 (”Banking Law“), the banking activities listed in Article 4 of the Banking Law (such as extending cash or non-cash loans, accepting deposits, issuing credit cards/bank cards) can only be conducted upon a banking license issued by the Banking Regulation and Supervision Authority (the ”BRSA”).
The individuals or officials of a legal entity who conduct these activities without proper license are subject to a prison sentence from three to five years and a judicial fine up to TRY 500,000 (approx. USD 87,000).
Furthermore, individuals or officers of a legal entity that use the title ”bank” or any expressions creating the misperception that they are operating as a bank in their tradenames, advertisements or public announcements without having a banking license are subject to a prison sentence from one to three years and a judicial fine up to TRY 500,000 (approx. USD 87,000).
Recent Developments
- The BRSA issued a press release on December 4, 2019 announcing that Eurobank Kos. SH. A. (the ”Company”) (i) conducted banking activities via the issuance of guarantee letters; (ii) made banking, financial leasing and factoring transactions via its website; and (iii) used expressions creating the misperception that the Company issued credit cards. The BRSA believes that the Company’s actions constitute unlicensed banking activity and decided to file a criminal complaint against the Company’s officials.
Conclusion
This press release marks that the BRSA has taken an action against unlicensed activities and filed a criminal complaint for the first time after a long time, demonstrating that the BRSA will continue monitoring the developments and unauthorized activities in the market closely. We believe it is of utmost importance that market players avoid any action that may be deemed an unlicensed banking activity.
