Bankingand Finance

Scope

Banking and finance law covers the relationships between credit institutions and their customers, payment and electronic money services, and the transactions of financial leasing, factoring and financing companies. The licensing and supervision of banks are carried out by the Banking Regulation and Supervision Agency (BDDK) under Banking Law No. 5411; with regard to payment systems, the regulations of the Central Bank of the Republic of Türkiye (TCMB) also apply. Credit cards and bank cards are subject to Law No. 5464, payment services and electronic money institutions to Law No. 6493, and financial leasing and factoring transactions to Law No. 6361.

The parties to the contract may be individual or commercial customers, and guarantors or third parties providing security are also part of the relationship. Under private law, the general provisions of the Turkish Code of Obligations apply to loan agreements; where the customer is a consumer, Law No. 6502 also comes into play. Interest, commission, fee and early repayment terms in standard-form contracts may be reviewed under the rules on standard terms and the control of unfair terms. The confidentiality of customer information is additionally protected under the Banking Law as banking secrecy.

Frequently encountered matters

• Review of interest, commission, fee and early repayment terms in loan agreements.
• Pledge, mortgage, suretyship and letter of guarantee relationships; validity requirements for suretyship such as form and spousal consent.
• Disputes arising from credit cards, accounts and payment services, and objections to unauthorised transactions.
• Financial leasing, factoring and financing company transactions.
• Steps to be taken against notices of account termination (hesap kat ihtarı), payment demands and formal notices.
• Restructuring of loan debts and negotiation of payment plans.
• Corporate finance documentation such as syndicated loans, project finance and acquisition finance.
• Letters of credit, letters of guarantee and trade finance transactions.
• The position of creditors and debtors in financial restructuring, composition with creditors (konkordato) and bankruptcy proceedings.
• Issues relating to banking secrecy and the sharing of customer information.

Process and points to note

In disputes in this area, the first step is to gather the contract and its annexes, the security documents, account statements, formal notices and correspondence in full. Whether the suretyship agreement is valid, whether the maximum amount and the date of the surety’s liability are stated in the agreement, and whether spousal consent was obtained are examined separately under the provisions of the Turkish Code of Obligations on suretyship (Art. 581 et seq.).

The enforcement route depends on the nature of the receivable. Credit receivables may be pursued through general enforcement by attachment or, for receivables secured by a pledge, through enforcement by realisation of the pledge; the debtor may object to the payment order within seven days (Art. 62 of the Enforcement and Bankruptcy Law). Consumer arbitration committees or consumer courts have jurisdiction over consumer transactions, and commercial courts of first instance over commercial transactions. In commercial actions concerning claims for payment of money, mandatory pre-litigation mediation applies: an application to a mediator must be made before the action is filed (Art. 5/A of the Turkish Commercial Code). Since the law sets monetary thresholds for applications to consumer arbitration committees that are updated every year, these thresholds should be checked against the current regulation.

As time limits for served documents such as formal notices and payment orders run from the date of service, the date and content of these documents should be examined at the outset. Demands to call letters of guarantee often also require an assessment of interim injunction.

Our office’s approach

In each matter, the contract, security and account records are gathered first, and which rights may be exercised within which time limits is set out in writing. The client may be either the creditor or the debtor; in both cases the assessment rests on the same review of documents and legislation. No outcome is promised; the available courses of action and their possible consequences are explained.