The Communiqué amending the Communiqué on compliance with interest-free banking principles and standards (“Amendment Communicated”) as well as the Communiqué on the procedures and principles relating to the information of customers and the public within the framework of the principles and standards of interest-free banking (“Communicated”) prepared by the Banking Regulation and Supervision Agency (“BRSA”) were published in the Official Journal on November 30, 2021 and bear the number 31675. The amending press release entered into force on the same date of its publication, and the press release on January 1, 2022.

According to the amendment press release,

  • The Advisory Committee will choose from among its members a Chair to discharge its duties regularly and a Vice-Chair to serve in the absence of the Chair. The chairman of the committee must reside in Turkey. In addition, the criteria for being a member of the advisory committee have been introduced.
  • The reporting period of the Advisory Committee (under the article concerning its duties and powers) to the Advisory Council regarding its decisions taken, has been changed to “until the end of January of the year following the date of the decision “.
  • The selection of certificates required by staff who will participate in the compliance and audit activities of the interest-free bank and the Advisory Board Secretariat is left to the discretion of the Advisory Board.
  • With the amendment statement, it is stipulated that the principles of adequate and effective information of customers and the public will be determined by the BRSA, and not by the Turkish Association of Participating Banks.
  • It is stipulated that the procedures and principles regarding the approval and monitoring of external service providers will be regulated by the Turkish Association of Participating Banks with the approval of BRSA. The reporting frequency for interest-free banking compliance and audit activities will be “at least once a year”.

The communiqué aims to regulate the procedures and principles applicable to participatory banks, development banks and investment banks providing financing (collectively, “Banks”) to inform their customers and the public within the framework of the principles and standards of the bank without interest.

Accordingly, according to the Communiqué,

  • Banks are required to inform their customers in a clear, concise and comprehensible manner of rights and obligations regarding products, services, operations and contracts, in accordance with the decisions of the advisory committee and non-interest-bearing banking principles and standards.
  • The informative notice must include at least the following elements: (i) the interest-free banking contract and the conditions relating to the product or service, (ii) the process and operation of the product, (iii) the compliance of the transactions with the interest-free banking principles and standards, (iv) the date on which the form is given to the client and (v) the information on the company’s website where the client can obtain more complete information on the product or service .
  • Banks are required to provide at least one information notice for each type of product and service, before concluding the contract with the customer. They are also required to provide the client with an information form indicating that the obligation to inform has been fulfilled. Banks may provide information verbally or in writing. It is essential to use language that the client can read and understand.
  • If the customer will be informed verbally; in terms of burden of proof, a wet ink signature or an audio or video recording must be made in order to prove the client’s free will.
  • If the customer will be informed in writing; The information form must be delivered to the customer via a permanent data storage or delivered by hand with an acknowledgment of receipt against signature.
  • In addition to the minimum content to be included in the information form for funds allocation transactions, banks must add information on (i) that the customer is the representative of the bank during the funds allocation process in the event that banks give power of attorney to its customers to deal with third parties on behalf of the bank, as well as the results deriving from this power of attorney and (ii) the policy to be followed in the event of non-payment of receivables due in consideration of the use of funds on time.
  • In the informative notice for customers of the participation fund, the Banks will inform their customers depending on the type of account when opening a participation account or a special current account.
  • In participation fund acceptance transactions, passbooks issued by banks in accordance with the Regulations on the Procedures and Principles Concerning the Acceptance and Withdrawal of Deposits and Participation Funds, Delinquent Participation Funds, Trusts and claims will not be accepted as form information because according to the Communiqué.
  • Banks are also required to publish information forms on their official websites in order to carry out their activities and allow customers to access the necessary information in the fastest and easiest way.

You can access the details of the Notice of amendment via this link, and from the Communiqué via this link (Only available in Turkish).